The property type I would suggest is a 4 unit property, which if purchased right can good cash flow and you can live rent free.You will not be able to buy investment property with only 3.5% to 5% down with such a low interest rate.

Unfortunately you can't use those numbers, so just qualify however you can, and do what you wish with the home after the fact (assuming you didn't sign up for an FHA which has restrictions).So if you make over $3k/mth and have $165k just sitting around, this home would make a nice income for you and satisfy the debt to income the bank is looking for (which is like around 43% - don't quote me on that), and you would live rent free in a desirable location near campus, with plenty of ladies for you to meet :).

I need advice on the best way I can accomplish the aforementioned objective and live rent free. what are my options and what would you do in this situation?

It's really difficult to house hack and live rent-free in urban California, just due to HCOL area.

We want to buy a multi family and house hack it to be able to live rent free or possibly lower housing cost so I can aggressively pay down my debt. 

Talk to a lender that can explain you all your options first.Also, at your age I would totally recommend to house hack, live rent free should be your first goal in my opinion.

We don't want to hire a property management company, as we would rather find someone willing to live rent free on the property and collect rent, and keep up the grounds. 

Have never done this before but seems like the best & simplest introduction to real estate investing as well as a way to live rent free  (in theory).

@Tommy DahlborgUse your fha loan and buy a duplex or triplex so you can live rent free and save save.Get your credit and personal debt in great shape if it's not already and apply for multiple unsecured lines of credit while you have a job.

So they essentially told every Tom, Dick, and Harry that they could move to Seattle in November and live rent-free for 3-4 months with no repercussions.