An index fund is a better option...eventually, I'm a fan of paying them off and treating them like fixed income, but not now assuming that your financial house is in order and you like owning and managing real estate.

Two years ago I purchased a duplex that was recently flipped, but the house is over 50 years old.

Wasn’t at my house.  

I'd also talk to the water provider and find out if the bill follows the tenant or stays with the house (where I am it is the later for water and former for everything else). 

. - We have lived in the house more than two years

As Dave ramsey recommends of not taking on a house mortgage thats more than 25% of your monthly take home pay.

Has anyone else started making the jump form renovating houses to building them new?

There are some that can walk into a house and right away determine how to fix it in such a way as to create, light,space and potentially add value. 

The housing market is pretty crazy here with a ton of people moving here from out of state.

I am thinking I will start by targeting Arnold/Imperial and work out from there if necessary, probably west toward Murphy/High Ridge/House Springs before moving south.