Continue to live in my SFR vs Refi and 203(k) first MFR

[Quinten Sepe]

I currently own a 3br/2ba SFR in a desirable neighborhood of the Kansas City, Missouri area.
Purchasing for 127k in 02/15, financed at a 3.875 rate, currently about 120k left on the note.
Since our purchase, home values have risen, with the exact same floor plan right next door with LESS upgrades (ie. full privacy fenced back yard, full LED lighting throughout, underground drainage for the gutter system, etc.) selling two months ago for 185k.

My wife and I are currently studying up and building mentor relationships, with intention of purchasing our first investment property within the next year.

At this point, I am strategizing the best thing to do with my SFR.

1. The route I am most interested in, is to refi it and rent it (about 1.5k/month) and then house hack our first fourplex.

2. The other option would be to continue to occupy the SFR and purchase the right fourplex through traditional means and down payments (for which we have the necessary funds).

3. Another option (that I'm not seeing much long term incentive in) is to sell the SFR.

So at this point, I suppose I'm asking the collective...
Any obvious hitches in choice 1?
Anything you would do differently?

Thanks for reading and helping a couple of noobs :)