I have to say that I am surprised that anyone would want to undertake a difficult logistical operation like this.

Do a search for similar subjects, but as I recall, you probably need to hold it as an investment property for at least two years before undertaking a 1031 exchange. 

That was a huge undertaking for your first flip.

While some may think this would be an easy undertaking, I can tell you it wouldn't be (no matter how good your attorney is). 

TX is a huge state and owning real estate anywhere is a large undertaking - one worth taking a considerable amount of thought and analysis.Lastly, I would 100% recommend using your VA loan if you do choose to buy.

The property was originally built in 1890 so as you can imagine this would be a significant undertaking.

(a) The landlord intends to demolish the dwelling unit or convert the dwelling unit to a use other than residential use within a reasonable time; (b) The landlord intends to undertake repairs or renovations to the dwelling unit within a reasonable time and: (A) The premises is unsafe or unfit for occupancy; or (B) The dwelling unit will be unsafe or unfit for occupancy during the repairs or renovations; (c) The landlord intends for the landlord or a member of the landlord’s immediate family to occupy the dwelling unit as a primary residence and the landlord does not own a comparable unit in the same building that is available for occupancy at the same time that the tenant receives notice to terminate the tenancy; or (d) The landlord has: Enrolled Senate Bill 608 (SB 608-INTRO) Page 2(A) Accepted an offer to purchase the dwelling unit separately from any other dwelling unit from a person who intends in good faith to occupy the dwelling unit as the person’s primary residence; and (B) Provided the notice and written evidence of the offer to purchase the dwelling unit, to the tenant not more than 120 days after accepting the offer to purchase. (6)(a) A landlord that terminates a tenancy under subsection (5) of this section shall: (A) Specify in the termination notice the reason for the termination and supporting facts; (B) State that the rental agreement will terminate upon a designated date not less than 90 days after delivery of the notice; and (C) At the time the landlord delivers the tenant the notice to terminate the tenancy, pay the tenant an amount equal to one month’s periodic rent.

Whether you walk or renegotiate depends on your willingness to undertake a big project, and if your numbers still work when construction goes over budget and takes longer than you estimated.

This home has been a huge undertaking with comparables showing lucrative results on the sale priceWould this be the time to assess our future, whether to sit tight and try to expand.

But I do believe in what you said, taking a grain of salt with everything, but I also believe in trying to get a realistic view of the pros and cons of any large investment I might undertake.