New to REI, but considering a move ourselves - House Hack?

[Jesse Watson]

My wife and I are just starting out in REI -- we are coming into some money from my stocks from my job and we want to invest some of it to work toward a goal of early retirement / financial freedom. We've been considering a long distance BRRR of a MFH, but at the same time, from a personal perspective, we're not happy with the neighborhood we live in for our primary residence, and we are considering a move. We would like to be in a nicer neighborhood (for those who know the area, we are currently in Lynnwood, and we would like to move to Seattle or Edmonds). But housing prices are still absurdly high in those areas, and it looks like future values are predicted to flatten out or even drop in some area. I'm concerned that a recession in 2020 could drive home values even lower, so I'm nervous about buying right now for fear we are still at the top of a bubble. From what I've seen we can get a lot more house for our money by renting, but my wife doesn't really want to rent because she wants to be able to make changes to whatever home we're in (paint walls, minor improvements, etc). Either way, we only plan to stay in the Pacific Northwest area for another 5-8 years until my daughter is little older, then we plan to get the heck out of here. Options we are considering:

A) Find some off-market deal (fixer-upper), then house hack it with the plan to rehab it, live in it ourselves, then refi on the new appraised value after 6-12 months to reclaim the capital so we can use it for more REI. Questions: will this work if we buy the property with a conventional loan? Would we need to buy in cash via a hard money lender? Can you even do this with a primary residence? I'm concerned that given how insane / saturated the real estate market is around here, there is almost no such thing good deal in Seattle / Edmonds.

B) Wait and see if values drop, then potentially buy on the dip (we have been waiting for a year to move - not crazy about this option since it involves waiting another year, and maybe being wrong about the downturn).

C) Tell my wife to suck it up, sell our house in Lynnwood so we can leverage that capital for REI as well, then rent somewhere in Seattle or Edmonds for our primary residence. (My preferred option)

Any thoughts?