$10K savings to you or higher cost to you? 

If one tenant has been in there for that long, there will also be some serious capex and turnover costs.

You should only be liable for tax on any appreciation since you inherited the rental (minus the cost of your improvements). 

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

Starting with house hacking is a smart move, especially in a higher-cost area.

Consider this the cost of your education.

Houses out here cost average $1.3M and rent for $4,000 per month. 

I have found that they worked really well when it comes to getting better tenants and better rents, and having less hassle, less headaches, and then getting a higher sales price; without paying closing costs or realtor fees.

I feel like there's still people trying to make BRRRR deals work close to the city and the truth is it's nearly impossible given prices, rates, and the cost of construction.

Quote from @Patricia Steiner: There are several lenders who offer low/no closing cost options for first time homebuyers.