@Jeron WalkerLooks like you are off to a great start I did the same thing you did by buying my first investment via "house hacking" and using low down payment FHA loan it is the best way to begin and low risk since you gotta live somewhere right. 

Of course, that return comes with some significant risk, so that always has to be factored into the equation.2.

This requires more knowledge of contractors, conditions of homes, and a little more risk.

With mortgage rates so low it is almost a no brainer and easy to make money on the difference (borrow at ~4% and invest at 6+%) in relatively safe investments, nothing is risk free of course.

I would assume no one is going to track you so if the deal is amazing and the risk is worth it to you go for it!

I would also point out that you did not give enough of your current status as to strategy, risk tolerance, age, income currently, etc. etc. etc.There are different options available for a private residence.

Can anyone offer some advice whether general investment risk or offer some similar experiences?

My eventual plan once I have enough capital raised for another downpayment would be to get another place and would only paydown the mortgage if the lenders say my debt to income ratio is too high.Your strategy should depend on your risk tolerance - everyone will have a different limit for the amount of risk to reward they are willing to take on.

Expanding our business through hiring doesn't make financial sense with the risk of capital for very small profit margins. 

I think that the risk of the car burning the house down is extremely remote.