I'd suggest staying with #1 and using a standard box to see how the market goes. Right now the mining base is increasing, thus difficulty is increasing. The market has been staying fairly level around the $15 +-2 range (ignore today's mishaps), and not quite following the difficulty changes yet. As difficulty goes up and price stays constant, the mining profit margin closes, so I would hold back on any big investments (don't be like that one guy who dropped $10k and bailed a week later).
That's just my opinion on investing in the mining atm. $500 to drop on a mining rig isn't much, and isn't too big of a risk. But buying a rack might be a little too far for the first few machines. Ultimately it's up to you since investing in bitcoin in most ways is a risk, and I wish you luck.