Sounds like you bought a house, with taxes paid up for the quarter already and you took possession sometime during the quarter. it also sounds like they forgot to calculate the tax credit due to the seller at closing. if that's the case, I believe most purchase contracts have a clause that states you will make it right if there was some miscalculation or simple omission at closing. even if not, the old owner paid for taxes and you are benefitting unjustly. the ethical thing in my mind is to refund the extra tax. there is no reason to go to court for this.if i'm wrong, please explain the situation better.

The market here is as good as ever and the other options sound both hard and risky.

It sounds like you are an experienced investor and well on your way. 

Do if it needed 15k in repairs I would aim to pay no more then 85kI know that may sound like a tough number to get.

Ok that sounds great.

From the reading it sounds like you will be moving to another location and renting out this house.

That sounds better, but I am unsure on the rents.

@Daniel Golub that sounds like a great idea to me.

Sounds like you and your wife are off to a great start.

@Joe Banks before you do anything else you need to contact a mortgage broker and get preapproved.I may be wrong but it sounds like you haven’t don’t that.