Ever smart to upgrade residence in high appreciating market?

[Polly Feeney]

Someone talk sense to me please.  

There is a home that appeared on the market recently that I would REALLY love to move into.  Surprisingly for the location and the quality of home, it's not too expensive.  My home is worth about 400k and the asking on this home is about 540k but I feel like this is twice the home and it backs up to a lake!  It's in a great location closer to everything etc...  

I have about 200k equity in my current home.  Very tempted to pull the trigger on this home with the justification that my market is one of the healthier markets in the country.... Denver Colorado type market where over the long term you will appreciate and in this area the appreciation has been fairly substantial.  (My home price went from 350k in 2015 to a estimate of 420k now but I'd say 400k to be more realistic)  Also I currently have my home on a 15 note.  (I could put the new purchase on a 30 year and it wouldn't be much different than what I'm paying now)  

I am trying to get into real estate investing and I only have 35k right now. I'm saving up currently. I'm sure the smart thing is to just keep trucking along, save money and pay off my current home in 9 more years and maybe look into a HELOC to use some of this equity for the impending (as most predict) market downturn. Put my money in other markets that make more sense with buy and hold with the BRRRR method that will give me better ROI.

Thanks in advance for your comments and / or advice.