You can go as tight as you want to go until you see a degradation in what's being produced. That'll be your indicator to go into another family of dogs. Linebreeding/inbreeding does a couple of things...1. it locks in traits and 2. It brings the crap to the forefront so it can be culled from the family you are working with.
x2...if you like the male side then breed daughter to sire...
then breed female pup from that litter and breed her to an uncle who is her mothers brother. get female pup from that litter and breed to grandsire...more than likely I would do it that way, if I were in your shoes...