I think the middle road of trying to do both gives you the worst outcome (tenants damaging your property, lower price because it’s no longer new construction).Best of luck whichever path you choose.

I am not familiar with amending in Turbotax, but one thing to note is on the timeline for filing amends (you have some time still, but also good to be aware): Generally, to claim a refund, you must file an amended return within 3 years after the date you filed your original return or 2 years after the date you paid the tax, whichever is later. 

Now, whichever option one chooses the rate is fixed for the next 30 years.

There no reason to wait any time or have any “whichever is lower” rule come into play.

Whichever you prefer.

Try to find ideal markets that offer upside while still being at a more affordable price point than southern California for example.A few good examples are Columbus Ohio and San Antonio Texas, although you'll have to find particular neighborhoods and micro-neighborhoods to consider in whichever market you are looking at.

One of the incentives was literally helping with part of the down payment (5-10%) for them to buy houses (they had to return the money when they sold the home or in 25 years whichever came first). 

More of a rhetorical question to consider than anything ... best luck to you whichever way you go.

Considering the amount of equity between the two properties, we are looking for a relatively modest $250K loan on either of the properties... whichever would be less expensive.

Home equity is 6-7% depending on length 5yrs vs 15yrs a 30 yr mortgage is 6%...Ideally rental stays rented out bringing in 1/2 of mortgage payment on new house based on numbers and is already cash flow positive bring in $1200/month (worth about 180k)and new property is going for 240k going rental price is about $2,000/month but I owe 18k still on private mortgage- reason I want to pay it off (4% flat 720 interest from cc for 1 year) to have it 100% paid off, then use home equity to pay off....or try to balance transfer balance after 1 yr which ever is lower but I figured that would mess with debt to income ratio and with this property being brand new, which is hard to find being located outside of closest major city...goal is to keep house rented out till it's paid off while also being cash flow positive with both properties combined and using paid off/ nearly paid off 1 to pay for 2nd rental, so I'd say lowest debt while also building wealth/equity not worried about a monthly/yearly profit per say as long as someone else is paying down the mortgage ie: my current property is bringing in $1200/month but current market value says it should bring in atleast $1500-$1600 but the tenant is phenomenal so she's paid same rent since 2017 I've put about 36k into between mortgage payments for 2 years and some up keep...she's put in the other 130k!!