I couldn't convince her that the contract required them to pay HO Insurance & RE Taxes, but since I felt they couldn't or wouldn't pay the Homeowner's Insurance or the Real Estate Taxes, I had paid them for all of this time.

There are a few vacant lots nearby that have not yet been developed, though one party paid a significant amount for a lot about 2.5x the size of this one, so that at least provides some basis for comparison.

While motivation is good, there is a cost to be paid. 

Then saving the extra money for an emergency fund as well as your next down payment is much more important.Also when you go to get the second mortgage the bank is going to care more about you having reserves (more cash or assets that you can easily make liquid) than seeing you have paid down you mortgage some.  

He said it is very effective because in his average price range, many people have been turned down for auto insurance at least once, or paid premiums for auto insurance and then could not keep them up and so the insurance was cancelled. 

I have not dealt with land, but if it is paid by cash, the closing cost might be just a few hundreds.

Ok so I’m not sure if “taking my first step” is the right title for this since I have a property I’m currently living in that is paid in full and in need of a ton of renovations.

Paid cash.

I'm conflicted because the warranty company which we have paid for in full is responsible for buying a new appliance if it's not fixable.

Fannie Mae's Homestyle will allow structural renovations to be paid when completed.