One alternative that you might be considering is that, can I downgrade to a 3 room HDB flat, free up ample net cash equity, and then purchase an investment property?

I think it is possible, but the rules are no different from my simulation of investing the net cash equity at 4% and 5% rate of return.

You are expecting your investment property to grow at this rate of return if not more than these rates.

Suppose you are targeting a 2 BR Condo for $1 million, and would like to sell your HDB valued at $750,000 for a 3 room HDB and then purchase this 2 BR condo. If you fully paid up for your 3 room HDB, you would need to down pay at least 20%(25%) of the condo price, which is $250,000. You will also need to pay Buyer’s stamp duty and additional buyer’s stamp duty of 7%(12%), since this condo will be your second property. These stamp duty would set you back another $94,000($120,000).

Your net cash equity of $328,400 is enough to pay for the downpayment and closing costs.

Since most Singapore properties after expenses and mortgage payments are negative in terms of cash on cash returns, this means that you likely need to top up the shortfall in monthly cash flow from your annual household disposable income.

In this case, since you are not getting any cash flow from renting out your 2 BR, what you are looking for are capital appreciation over time.
It might make sense to buy a condo to live in and wait for it to appreciate, rather than purchase an HDB and a condo.