Are you referring to the crazy law where if you buy a property from a deceased person (we have had this happen via foreclosure) that you (even if you were the lender) are responsible for inheritence tax. 

No, the taxpayer needs to remain consistent "how you sell is how you have to buy."

Learn how to buy properties to flip or even buy and hold on paper to gain some expertise. 

The best way to start investing with 0% down is to buy a multi-family and live in one of the units. 

I am lost on which avenue to take from the options of house hacking, buy and hold (short-term rental), buy and hold (mid-term rental), buy and hold (long-term rental), BRRRR, flipping, etc.

I've been a real estate investor for 3 years, at first it was going to be buy and flip but I re-evaluated my markets and changed to rent and hold.

Do you think we'd be better off selling the property and buying some land to build on elsewhere, or should we clear this?

BiggerPockets also has a calculator to analyze deals, and I highly recommend you start this as soon as possible, even if you are not ready to buy.

Yes, it's possible to use a 1031 exchange to roll the proceeds from selling your first rental property into a BRRRR (Buy, Rehab, Rent, Refinance, Repeat) deal, but there are a few important things to consider.

I'm not bold enough to buy real estate at negative leverage - few deals in my area (and I presume, Manhattan), are trading at "Cap Rates" greater than 7%.