Two Family House Advice--Should I Sell?

[Chris S.]

I bought a 2 Family home in the Boston area 7 years ago for $385K, putting roughly $40K into initial repairs.  I think I might be able to sell it today for between $600 to $620K.  Rents for both units total about $3000.  My current mortgage is about $280K, so if i sold at $620K, i'd clear $340K cash.  The issue is that my wife and I are looking to buy a single family and could do so without selling the two family, but it would be tight.  I'm tempted to sell at where I think the market is kind of peaking a bit and use for a newer house for our family.  The two family was built in 1930 and even as is needs a new roof and electrical repairs.  I feel if i kept it, I'd have to keep putting money into it.  My thought was to take the extra $1000-$1300/month saved from having a bigger down payment on a house and using it to invest in an index fund.  Over 30 years at ~7% that would be $1.6 Million if I invested 1300/month.  What should I do?