The plan is to hold the property for long term.

What do you think of this plan?

From my research, the only gray area would be whether or not the tenant continues to plan to reside there / has ended their residency or not?

This is what I plan on doing. 

Transaction went smoothly-Seller agreed to repair AC and give a warranty, and seller's agent gave a concession for the cleanout and I bought it. 

My wife and I own a "second home" in Reno Nevada which we purchased with 10% down and were planning to purchase another one, but our lender told us that we can't get another loan for a second home within ~100 mile radius of an area where we already own a second home/primary residence.

But there is a glitch in your plan. 

Purchase price of $1.1mil, and I am planning to put in some work into it ($200 to 300k) since the house hasn't been renovated for over 30 years. 

I really like what I do for work and don't plan on getting out of that industry to go into REI full time.

This would allow you to eventually plan strategically to move into the new house and convert your current primary into an investment property... to then 1031 into your next project(s).