250K appreciation in 5 years with $400+/month CF. Time to exit?

[Jimmy Watson]

Hi all,

I purchased a 3 bed, 2 bath condo in Oceanside, CA with a VA loan for 0 down in 2017 for $336,000. My mortgage rate is 2.75%, I owe 300K on the property, and the unit right next to me just sold for $530K a few months ago. I believe I could easily sell it for about 550-600K in this hot market right now. I'm really deciding if now is the time to sell but I just don't have enough experience to take the next step so I'm turning to you all for help. Here are the numbers:

Expenses:

PITI: $1695 / month

HOA: $325 / month

Property Management: $145 / month

Income:

Rent:  $2,600 / month

Total profit:  $435 / month (~$3,000-$4,000 a year due to occasional repairs).

With rents continuing to rise at unprecedented levels and home prices expected to appreciate another 15-20% this year for San Diego County, it seems silly to sell at this point with a cash flowing rental property.  However, I just can't help but think about pulling out all of that equity seeing as my condo has nearly doubled in value in just 5 years.  Being able to pull almost $300K from putting 0 down is extremely enticing but my greed is setting in about it doubling again in value in another 5 years (unlikely, I know- but let me dream).  

Should I stay or should I go?  I feel like best option would be to 1031 and go out of state, but I have analysis paralysis about where to start and I don't have a firm grasp on any other market.

Thanks in advance!

James

[Mike Dymski]

Congrats on turning $0 into a $250k.  You seem to be making good decisions so far; so, maybe people should be asking you for advice.

I recommend running your existing property and your alternatives through your deal analyzer and the numbers will speak for themselves.

This must have been your primary residence at one point with the VA loan; so, be sure to factor in the section 121 gain exclusion on the sale of a primary residence (tax free gain on $250k in appreciation is substantial).