I'm wondering if I should build out the house to sold comps valuation (bigger more expensive house chasing equity valuation) ORShould I build just enough of a nice mountain cottage for best cashflow.

Or buy a thermal camera to check for heat losses, they have gotten really cheap. 

Even if you rent at a break even or slight loss, if you could have 3 years of rental income offsetting your mortgage while realizing 3-6% appreciation, could be worth it, especially if you think appreciating for this area will exceed national averages.

One thing I can assure you, there isn't an asset class in the world that would have me comfortable at 100% leverage.Your money on the sidelines is great in principal but in reality it will be put to work covering the net loss on the properties you buy as you will be overleveraged and won't be able to cover your operating expenses with the rent.

I look forward to being involved with bigger pockets and am excited to connect.

If anyone on bigger pockets is on Rod Khleif coaching program please let me know how it turned out for you?

My wife and I are hoping to buy another single family home that is bigger sometime in the next year for our new family and potentially rent out our current home to tenants.

The allowable rent increase is not typically the big issue with rent control, the bigger issue is getting rid of poor tenants that pay their rent.

Equity growth is the priority with mitigating any cash flow loss or optimizing the property for superior cash flow.

It looks like you've already received some stellar advice here on Bigger Pockets.