Okay, the subject line is a bit of a joke, knowing the market does crazy things, but here is the deal:
I bought a short sale in 2009 with a friend and fixed it up with a 203k loan. We couldnt have timed the market better. We bought in DC for 295, put about 100k into the property and had instant equity. My co-owner is a real estate agent and believes we could easily list at 725 today.
Now, we are considering whether we want to sell the house now, or wait it out for a few more years. I have since moved on to buy another property with my wife where we live currently. My friend still lives in the unit and we split the costs/profits equally. We rent out to a friend, and we also each pitch in some money, but it basically runs on auto pilot.
The question we are looking at is whether to sell in the next few months to unwind our investment and go our separate ways (or maybe on to a new project), or hang on for a few more years. If we sold now, we estimate we each would pocket about 150k.
The property is in a hot neighborhood in an extremely hot market. Inventory is extremely tight and properties are not on the market for long; the majority of houses are going very close to list price. Although no one can predict the future, there is a good chance we will continue to see appreciation for the next few years. We are at about a 78% appreciation currently.
However, holding the property would require additional capital in, and if we do realize further appreciation, we may also be limiting our market because we will be entering a price point where there are significantly fewer buyers (conservatively say 800k). Interest rates will also play into the size of our market.
I am torn between realizing a terrific profit now, or holding and seeing where the market goes. I want to be neither the person who regrets selling too early nor the person who held on too long.
Trying to find what my gut says, BUY or SELL? I thought I would subject myself to the forum, for the first time no less!
Thanks.