DownSizing in a Hot Market

[Ben Le Fort]

Hi All,

I'm living in Kitchener-Waterloo, Ontario Canada. The real estate market has been very hot here the past few years. we moved into our detached house in 2016 and paid $375K and it is currently appraised at around $500K. 

My wife and I recently bought our first income property in Halifax Nova Scotia (a less expensive market and my hometown). 

I want to accelerate my real estate investing and have been thinking of ways to tap the equity in our primary residence which has fallen into our laps (currently about $160K in equity in less than 2 years). 

We are playing with the idea of selling the house, realizing our increase in equity (in Canada gains on a primary residence are tax-free). Downsizing into a townhouse and investing the $150k (or whatever we walk away with after fees and closing costs) and reinvesting that capital into more cash flowing income properties out East. 

What do you think is this an Insane idea or brilliant?  

Thanks,

Ben