Pay off first home with house hacking or invest in another?

[Kevin DiMaggio]

Hi there! Looking for some advice, so I'll try to provide as much info as possible. My fiancée and I purchased our first home in 2017, and accidentally stumbled into about $125,000 of equity with it. It was a foreclosed HUD home, we bought it for $125,000, and it's now worth about $250,000. We currently owe about $102,000 on the mortgage, with an interest rate of 3.75%. We've also been house hacking with it, even before we knew what that meant. Our expenses are about $1,400 monthly (plus the occasional oil fill up). We have 3 roommates, and their rent totals $1,900. So we have $500 income most months (oil is so expensive). I also work a part time job and bring home between $300-400 weekly from that, and we have savings in the $60,000 range. We're looking at purchasing another home, and are unsure which route we want to take. We're considering the following options:

1) Purchasing a single family/duplex and renting it out, continuing to live in and house hack our current house and building equity slowly.

2) Purchasing a duplex, rent out one side and live in the other, rent out current house. With this option, we're wondering if it's better to offer it as a 3 bed 1.5 bath with 2 bonus rooms (which we live out of), or rework one of the rooms into an actual bedroom to make it a 4 bed.

With either option, we're also wondering if it's best to have the cashflow of our current house to offset any unexpected expenses, or if we should pay extra and try to pay off our current house as soon as possible. One intangible factor is that we'd really like to live in a new area, so if numbers end up being comparable, we'd end up looking out of state for the duplex to rent half of. Any wisdom or insight would be highly appreciated, as this would be my first big real estate move! Thank you!