San Diego Equity Investment Question

[Brent Cline]

Hi BP! This is my first post and I'm looking for a bit of advice. I bought a townhouse in San Diego, CA in the Midway district in 2016. It's a 1400 sq ft, 2 bedroom/2 bath with an extra room for an office or small bedroom and a 2 car garage. It's in a gated community with a low HOA fee and has a pool. Since I bought it, it has appreciated by about 110k. I also invest in KC, and bought my first quadplex this year (a BRRR in Raytown, MO).

My plan right now is to sell the townhouse and pocket that equity, then use my VA loan here in SD to buy a small duplex. It would allow me to buy a higher priced house and lower my monthly payment due to the tenants from the extra unit. I would apply the money gained from sale of my townhouse to the KC market and purchase more cash flowing properties there.

My other option is to refi the townhouse and rent it. With mortgages in San Diego being so high, I would most likely break even on the mortgage, but could potentially make a couple hundred if everything went perfectly.

Other notes: The Midway district in San Diego is developing really well. They have multiple housing projects coming in the next 5 years which will add several thousand new housing units. They are also renovating the SPAWAR complex, renovating the old postal office into luxury offices, adding a new trolley stop, fixing the roads and intersections, and they’re getting rid of the “red light district” in Midway. With it’s close proximity to Point Loma and Liberty Station and it’s incredible schools, I think the Midway district is due to sky rocket in value in the next ten years.

My biggest question is: With the current market situation is it better to sell and utilize the cash made from my equity to continue to purchase out of state properties or break even by renting and holding on to a property that has a bunch of equity potential?

I appreciate any feedback! Thanks for your time and input!