What route to choose really depends on your goals.

My agreement clearly states that I have the right to assign (if I choose so) it to anyone including investors, other cash buyers, etc... 

If you choose to leave a small balance i would suggest no more than 30% of your total limit.

OK, after looking at your post again my suggestion would be to buy a house in Terra Santa as close to the school your kids go to as possible- Wait for a foreclosure that needs paint and carpet, get an account at Home Depot to get an idea what you can do for a budget plus they have financing and a one year guarantee. 

Kitchen needs to be redone with new appliances and probably a new layout, carpets need to be replaced, walls need to be stripped of wall paper and painted. 

Adding all modern amenities, new flooring, paint, New lights, opened walls for an open feel, reconfigure the kitchen, installed a/c, dishwashers, laundry, etc.I am getting $1100 for my up unit and have a deposit collected for the down unit at $1000 a month.

--Have the seller do some repairs/upgrades (new paint, counter tops, new fence, carpet, etc) and then make the purchase price $140k with seller paying closing costs - therefore the seller will recoup that money after closing and we don't have to do the upgrades and such ourselves. 

ProsRisk DiversificationPotential to find better opportunitiesMore property available to choose fromConsFewer economy of scale benefitsStretched to thin due to more things to keep track ofAdditional risk due to higher overheadRisk of needing to rely on a new set of individuals (Sometimes the Devil you know is better than the one you don't)Potential to end up with less profitable opportunities

If it only needs a coat of paint, you can't hardly screw that up.

ARV 550K all the house needs is some paint.