Stats on the AZ home: Remaining mortgage balance: $203KCurrent market value: $280K-$300KMonthly Cash flow: $400.00My personal financials:Current savings account balance: 10KThinking about pulling my 401K balance of $20K to better leverage it on real estate.Total potential cash: $25K-$30K plus the possible $60K-$70K from the AZ home sale.If I sell the AZ home before the end of the year I may stand to make (after closing costs, realtor fees, etc) around $60K-$70K tax-free since I will be taking advantage of the 5-year capital gains exemption rule (Owner occupied for at least 2 out of the last 5 years).I want to purchase another owner-occupied home in VA for a future rental property as well but I am having trouble deciding whether I should sell the home in AZ and wisely use the proceeds (not spending the whole amount but putting a portion down and using some to fix it up, while also leaving a reserve to possibly purchase another home).

@Austin Wise The househack with the VA loan is a fantastic strategy.

You wouldn't want to make an investment only to turn around and have to sell it if things went sideways  (relationship wise) and then you end up losing money in the long term.

Start local market wise. 

I saw some good deals from wholesalers, but all they request to pay cash or hard money.Is it wise to use hard money to purchase primary residence, rehab, refinance, and move in? 

-------------------------------------------------------------------------------------------------------------James Wise, of Holton-Wise Property Management Group, in Cleveland, Ohio; he had a few videos on U-Tube, a year ago, in which he goes over points, in how he manages Rentals, for himself, or for others.

Do remember this, if you sell it now you have some tax shelter under capital gain tax, if you rent it out and sell it later you can only protect yourself, tax wise by a 10-34 exchange, unless you move back into the house and live there for 2 years.I would lean toward the rent and hold only because your house is in a great market and location and should only go up in value and rent.

When you buy you pay the commissions, however, accounting-wise it doesn't show up that way on the closing docs.  

- What do I need to ask for contract wise?

If your place is roughly similar in size (sleeping wise) then renting it as one place is the way to go.