Hold or sell? Bay Area townhome

[Huimin Zhang]

Hi everyone, I’m new to BP and feeling thrilled to discover this site! So, I got a problem that has been concerning for a while. We have purchased a townhome in Mountain View, California last year, and the final price was 1.18m with mortgage of 700k. This is not our primary house and our cash flow on the townhome is negative $2,000. I’m unsure if I should sell it and put the money to OOS investment or hold it until the market is HOT again?? Please help! Thanks in advance!

[Frank Wong]

Sell it today and ask questions tomorrow. -$2,000 a month is painful.  This is what investors who only buy for appreciation will realize.  It's PAINFUL to watch real money leave your real checking account every month. They all say I can withstand the negative cash flow each month.  Are you sure?  Hold negative and then finally capitulate and sell in 3yrs for a negative cash flow loss of $72,000.  

I see this all the time in the Bay Area.  I talk so many of my clients out of buying these type of deals.  This is not investing, this is called gambling when you play for appreciation for deals like this.