Well, my parents did not like the idea of not having a "back up" in case law school didn't pan out.

On one thought I have a backup plan to just get a SFH, live in it for a year and then rent it out afterward (boring).

This is our issue and a quote that we received from a plumber:"Existing sewer line is flexed with back-falling and "belly" exists, holding water constantly causing the back-up issues and is approximately 12-13 feet deep.

2) Use a large chunk of the money as a large downpayment on the next house, keep some backup to cover costs (vacancy, repairs, etc) and not pay off the current mortgage yetI figure the answer is "it depends".I am leaning towards option nr. 1: pay off the house / and use the cash flow to accelerate paying off the next house quickly.

That will remove it from your credit history and should get your credit score back up.

Regarding getting creative with strategy - A newer idea that's come across my mind is to purchase residential lots or just land in general (to hold and sell once new constructions pick back up), while i continue to search for SFH.

Update: Seller decided to NOT extend another 45 days to us and went with the backup offer.

As far as your concerns about the restrictions and a recession, I always buy with two back up plans.

The money can be good though, if you have the stomach for it.Plus you would most likely end up working for a larger company in order to have some back-up and to get cheaper liability insurance....which means you will only make 60% approx of the inspection fee.....

If you still don't get it, always ask for backup position.