Given the size of the income you are working with in semi-retirement, one would assume that you do have substantial capital to work with, or at the very least can accumulate it fairly quickly, so on top of just real estate tax savings strategies, you would also likely benefit from a team who has subject matter experts in estate and gift planning. 

Regarding the long-term implications of using rental properties to offset your W2 income with depreciation:Depreciation Recapture and Tax PlanningDepreciation Recapture: When you sell a rental property, you'll face depreciation recapture taxes on the portion of the gain attributable to depreciation deductions taken.

I am also adding another bath in another portion of my house and expanding the bedrooms.

Primarily with creative terms but also general strength of buyer position has resulted in considerable discounts or investor incentives particularly with transactions involving healthy cash portions of 1031 Exchanges. 

This is not a financial planning question but a simple can you afford to buy a home and how much can you afford if you can buy.You might have better luck posting in the home buying section of this site as this personal finance portion of BP doesn't get much attention.

The redemption rate was 8% on the taxes plus some portion of the overbid.

$1025000 house vs $650000 house are in same track, same lot size, main SFR same square footage?

You and we both expressly intend that no portion of the Collateralized Goods will constitute a “fixture” attached to any real property, and that the Collateralized Goods will be removable personal property.

Here are a few:Invest in Rental Properties:Buy Rental Property Outright: Use a portion or all of your equity as a down payment to purchase one or more rental properties.

Your rents are always on time - at least, the portion that is covered by Section 8.