Definitely not afraid of the work - just happy to have a path forward and to know that you think it's possible in the current environment.

Even with nonconforming, can it truly be a comfortable bedroom? 

We are thinking about house hacking, but we've never lived in a multiplex type of neighborhood, so this is going to be really new for us, and cannot say that we are fully comfortable with it.

First, it's your lease, so you likely know it inside and out, giving you a level of comfortability which no inherited lease ever quite has regardless of how well it's written.  

Newbie here,If the refi numbers don’t bring in your comfortable cash flow, then sell and keep it going.  

For better or for worse, we aren't "federally" in a short sale environment anywhere in the country at this point in time (Yes, maybe one neighborhood in one city may have disproportionate value to debt, but not on ANY large scale ANYWHERE).

It does take a little playing around with the numbers and knowing what you are comfortable with in terms of risk.

Finding lenders and mortgage brokers that specialize in DSCR loans will help with getting better terms as they have investors comfortably buying these loans after the loans fund which helps replenish the lenders cash for more loans to investors.

I can comfortably afford both the starter home and the more expensive home with my income, given my DTI is basically zero.

I partner with two private lenders in Charleston who do this - they short-term fund 1st's and 2nd's in smaller balances if they're comfortable with the deal and the borrower.