We have >$2m in debt spread across the investment properties and our primary residence.

Buy and occupy for 2-3 years, improve it, and sell it tax free (up to $500k if you and your partner both OO for 2 yrs) so you can move onto the next one.Starting to think team house hacking might be the primary way for folks to make this model work nowadays.

@Paul Amegatcher I read your explanation of a "Zombie Foreclosure/Property" which was leaning more towards advice for the Buyer. 

From my observation/experience, Berryessa and Piedmont Hills areas are more family-oriented, so the demand there is generally for primary residences, renters, or travelers visiting families.

If my primary residence has $500k HELOC, could I use it to purchase a 2nd primary residence and rent out the first one?

Do you have over $200k in equity in your primary home?

You can buy a single family home, live in it for a year, then rent it out afterwards, and that would effectively be an investment property after you moved out, but you also got the more beneficial terms of it being a primary residence loan.You could buy a single family home and rent out bedrooms while you are living there, and that would effectively be an investment property, but again, you have the more beneficial terms of a primary residence loan.I wouldn't get caught up so much on if a property you buy is an investment immediately so much as I would focus on what your goals are and how each purchase would be step towards your goals, whether that is house hacking or just buying investment properties you don't live in. 

However, I am the primary owner.Current Situation: My aunt’s daughter (my cousin) lives in the house rent-free.

I have found a couple but they want me to insure my primary as well as the rental.

In Denver where I invest it's actually a PLUS to not have the other unit considered separate because permits are only allowed for STR if you're renting out your primary residence and I know many folks who put a locking door on part of their home and have a separate external entrance to that part of the house, and rent it out as an AirBNB without it being considered an additional unit by the city.