Dave Ramsey style or take a chance..?

[Douglas Evans]

Hello BPers!(First timer) I live in Southern California and I'm fresh into Real Estate investing/Land lording (Like 3 months fresh), and i'm already getting the itch to do more than just my one property. Long story short, I,ve been planing on renting my unit in Santa Clarita (North LA County) for some time now but was hesitant to get started. Finally, an opportunity came up and I was moved out and renting my condo in less than a month.  I'm cash flowing a little over $500 after all said and done so I "think" I'm doing pretty well starting off. But theres a catch, and this is where I need an expert opinion.  My initial plan was to do the Dave Ramsey style of investing which was to pay it off quick as possible and eventually own it up right, but then I started learning of all the possibilities to get a steady cash flow over time And not to mention, how EXPENSIVE most of California is right now.  So here is my personal debate, should I hold onto it, get the good cash flow, and save for another property or should i take advantage of the no capital gains tax, split the profits, invest half in a residential multi family out of state, and maybe the other half in a money market until the market "crashes" or another opportunity comes up.  Here is what im working with, 30yr 7/1ARM @ 3.25% first 7 years, (5.5 to go)  Not much equity in the loan itself only about 3% If sold today I could profit about 150k, but if market continues, could reach to 200k mark in 2 years and still be eligible for no cap gains tax.  The Santa Clarita market as a whole is booming and my unit is in the better part of town. But to sell and invest in the same place, or even in most of California, the numbers just don't seem right. Any opinions and knowledge will help. Thank you.