I have excellent credit, the ability to put 20-25% down and strong W2 earnings.

We have paid down the house (extra payments) and currently owe 118000 roughly. 

In all case, who cares about the taxes when we are earning this much.

With extras the original owner paid the hefty sum of ..........$ 6840.00 .    

We have 3 extra bedrooms since its a 4 bd 2.5 bath and we are going to rent out two of the rooms for $700/door so total money out of our pocket every month is only $400!

If you're getting difficult tenants, then you can run into many, many problems and it's seriously not worth it the extra percentage on the cap rate you could get. 

If you have properties that are cash flowing, banks will normally recognize the extra income after you have owned the rental investment for two years.

That will keep you busy and it won't earn you many gold stars from the vendors either.

Professionally, I'd figure out what you need & build and then "save" (aka "not use up") additional land for the NEXT expansion versus utilizing it for extra-wide driveways & aisles.Also, is anyone helping you design this? 

I assume the $200k house will actually cost me an extra percent or two in fees and closing costs (making the mortgage more like $154?).