I'd proceed with caution and spend some time learning the zoning code.

A few days later we sent thru our request and they wont budge.There are a few days left on the inspection period and the seller has twice asked us to send docs releasing them from the contract so they can proceed with another deal.

All fees were paid at closing with the proceeds.

Should I proceed with my first SFH if I can find the right deal? 

Should you proceed I will happily refer to a good realtor and/or property manager if that helps.

If not proceed at your own peril.

., Landlordology.com bases one of its posts on these Nevada statutes:Title 10, Chapter 18 – Discrimination in Housing; Landlord and TenantTitle 10, Chapter 18A – Landlord and Tenant: DwellingsTitle 10, Chapter 18B – Landlord and Tenant: Manufactured Home ParksTitle 10, Chapter 18C – Landlord and Tenant: Commercial PremisesTitle 3, Chapter 40 – Actions and Proceedings in Particular Cases Concerning PropertyHappy Googling - or just ask your RE-friendly attorney!

There's no reason to keep it unless you can't cover the debt with the proceeds, but you are only going to get 75% of the ARV on a refi, so if it's worth $140k (and @George P. is correct on the value), you will only get $105k on the Refie (minus fees/costs), so you wouldn't have enough to pay off the debt to begin with.It's always better to unload a losing deal before the additional future losses do too much damage.  

Hug and proceed!

Can you guys give me suggestions on how to proceed or should I just go on to the next buyer.