I love everything else about this house, so I know I'm just being emotional about the purchase so I'm looking for objective opinions.Thank you so very much for your help.

Applicant seems emotionally stable, level headed and drives a nice clean car.

I would really appreciate any thoughts or advice as I am learning a lot about REI and would hate to make a bad decision on our family's home purchase:SFH: ~$750K, would require additional ~$90K downpayment on top of the VA Loan (given ~420K limit for 0 down)Positive: Wife/kids love the home; am sure I could Airbnb the in-law suite to help pay mortgage, in great areaNegative: Need to use $90K downpayment/opportunity cost of having money locked up; home prices have peaked in area and may be due for correctionDuplex/Multi-family: ~$300KPositive: I don't need downpayment, can use downpayment funds to buy another investment property, income from other unit(s) would help cover mortgage (though not totally)Negative: Apt/duplex life isn't as appealing, though could do it a few more years and save up to buy dream home in next down-turn, just ok area (though kids are young so schools don't matter yet)The emotional decision would have us jump at the house as again my wife/kids love the house has a nice yard w/ playpen, safe area, and we'd love to settle down after the constant moves but I would hate to be in a financial bind in a couple years if there is any downturn in the economy, especially if I have the chance to have additional side income by investing the downpayment funds instead as well.Any advice?

Joe Blow will respect you as there in no emotional connection.  

They did that so that owner-occupiers would get EMOTIONAL about it.

So I'd only go the 1031 exchange route if I knew I'll have the emotional strength not to make poor decisions when the clock is winding down and just accept that I'll pay the taxes and still be able to get a good investment property. 

CRTs can be very rewarding emotionally.  

Its sort of commercial, sort of residential, sort of a fixer to turn it into something someone would actually use.Fourth, you're emotionally invested in it.

It is interesting to see the varying viewpoints on this subject and food for thought.Based on everything I have read in these responses, what I have learnt is that (a) our growing population should put a natural floor on home prices to reflect replacement cost minus depreciation and (b) if you can buy at deep discounts, you should do it because any future depreciation should be offset by the discount.My own decision based on all this is to perhaps continue with my flip business because it gives me returns similar to a good buy-and-hold property while keeping my cash free from any long-term committments in case the economy weakens.

In the event of a loss/lawsuit (say, for example your tenant's broke friend "trips" on the sidewalk and suffers emotional trauma that renders them unable to work for life), ALL money sources will be listed - your insurance company, the entity that owns the property, you personally, all other assets (LLC's, businesses, etc.) owned by you personally.