Buy if the numbers work.

You can offer to buy these properties and assume the existing loan.  

My first property was a duplex, and then a year or so later she bought her house, and we moved in together living in MIL suite basement and rented out the rest of the house.

You can't directly do something to allow you to sell the flip, and buy the triplex without paying gains. 

.: So in 25 years people that buy now will be glad.

Limit on rentals and we are above that limit today, so no new buyers at this time can buy to rent. 

I am buying a duplex about 80k under what it will appraise for.

In depth knowledge of a city's economy is not necessary if you are buying a single SFR.

I’m weighing two options for our housing situation and would greatly appreciate your advice, given the complexities involved.1.Renovate and Buy Another Property•Invest to renovate our current home adding a bedroom to the house given our family outgrew the house.

A way to look at it could be to find buyers first and figure out their buy box and after that go out and hunt for deals for them and run it by them when you find something.