1. It boils down to your risk appetite and future trajectory. If you have a low-risk appetite, you can consider staying in your existing house and putting your lump sum into any of the high savings accounts that yield a high return. Assuming you pump in 100 grand, you are looking at five grand annually potentially, and this is a pretty good return, considering the current market. Presently, many banks are giving promotions on high-return savings accounts. I suggest you research that up, but note that the returns will change as they update it regularly.
2. Depending on where your existing house is and factoring in your child’s needs, you may or may not want to continue staying in this house. E.g., if you are staying at a location that is highly accessible to transport and has an ideal school that you think is good for nurturing your child, then you can consider staying. Otherwise, you can decouple if you still wish to purchase a second property. That helps you escape the ABSD fee, and you can use that property for a higher investment yield (The Propertylim Brother released a podcast series on the different housing tiers pros and cons and strategy, you can listen their podcast to get insights into the insiders pov). But given the interest rate for bank loans is relatively high now, unless you can pay in full or get a lower loan amount, then you may consider this option; otherwise, if you are looking to max out your loan, you may find yourself paying for the interest rather than the property. Assuming you decide to purchase the second property, you can also consider selling your car to cut operating costs and hopefully make a profit since COE is at its peak in condition if your kids are of the age where they can take public transport themselves. Consider this as part of teaching them to be independent. The thing about owning a second property in your case is that the gov requires you to stay in the private property if you own a public and private property, so you can rent out your existing flat and use that rental fee as part of the monthly installment to pay for your apartment. Also, note that as much as the private property may appear to be lucrative when it comes to the “flip” there is many underlying cost to the net profit that agents don’t tell you (e.g., maintenance fee, interest fee, etc), so if you factored that in, the gain may or may not be as high as what people project to you because what is said often is the gross profit.
3. Diversify your basket. You can do both 1 and 2 tgt, and at the same time, invest in blue chip stock that also gives you dividends. It all depends on your financial strength and capacity.
Take what I say with a pinch of salt, as I am no expert in this field. Anyway, you can also read more about taxation to look into paying less legally. As commenters said, contact a property agent, ideally someone you are close to, so they won’t provide advice that only benefits them. I hope you’ll weigh your options carefully and pick the best fit for your lifestyle!