House Buying Question

I am currently getting my primary residence (I own no other properties) prepped to put on the market. It was purchased in 2020 and I can now sell it for likely 50% ROI. I don’t have to sell, but it’s really hard to pass up on this return. Once it is under contract I plan to downsize such that the profit and current equity could pay for my next house in its entirety, but more likely be split between a down payment and market investments at some undetermined ratio (basically my question). My plan is to live in the next house until we find our “forever” home. May be in a year, may be in 3 or longer, who knows. Not in a rush but want to be able to act if/when we find something. Once we make that move to the forever home, I intend to keep the transition house as a long term rental property, as I need to diversify and have been wanting to get into real estate for a while.

I am an absolute novice in terms of tax implications on real estate investment property. More so on investment properties that start off as primaries. So looking for advice on how to handle this and what factors I should consider.

Ultimately, what kind of down payment should I make on the transition house. Obviously 20% will be minimum, but how much higher do I go? The idea of having a tiny mortgage and a mostly paid off house is nice, especially with the current rates and market uncertainty. Can I beat 5% right now? I’m probably not going to this year. Do I go for a 7 year mortgage?

But I really don’t know what tax implications I need to consider since I plan to rent the house eventually. Are there advantages to paying less now and carrying a mortgage once it’s a rental that I need to consider? Or paying it off once it isn’t my primary residence? I assume if I carry a mortgage, the lender will recast (is that the right term? Refinance? Throw it in the trash and start over?) the loan once it is no longer my primary - should I wait until then to really pay it down? Is it as simple as pay it off if I don’t think I can beat the rate in the market? Is the tax implication not even worth putting this much thought into?

My brain is telling me just to pay half, carry a small mortgage, invest the rest, call it a day. But my brain is often dumb and doesn’t know what it doesn’t know.

Yes I’m going to talk to my accountant but the minds of many are better than the minds of one. Especially the MB.

Yes I’m going to educate myself more better on real estate before I commit to these investments but the move is happening soon either way so no time for that now. I need the help of internet strangers to make large life decisions.

Thanks.