I was thinking that house hacking could help to mitigate this risk as you'd be your own tenant (or one of them at least) and close enough to actively manage the investment.

While you are waiting for that to happen, educate yourself on how to properly screen tenants and mitigate risk for when the bad ones sneak through.I use situations like this to educate myself and build policy to prevent the same problem from happening again.

That can be mitigated if you get a property manager to run interference for you.From a cash flow perspective you obviously get no cash flow from buying a SFR and living in it. 

I was a financial planner for 17 years in Canada, and now doing real estate in USA... diversifications is diversifying and mitigate the risks...tax strategies are awesome in Real Estate, especially in USA. 

Having cards from all different banks is essential for mitigating the risk of worst case scenarios (i.e...house sits on market or flip is a FLOP).  

In 2009, after the collapse in the housing market and after the banks cut off further funding and called in loans, you were able to buy 1st mortgage debt for .10 cents on the dollar. 2nd mortgage liens were available ...

It can be a little scary doing your first deal alone so finding a partner helps mitigate your risk. 

The lender's incentive is the mortgage is insured and their risk is mitigated.

If it's a market that is still recovering from the crash of 2008, then I would consider it if you can finance the property with 25% down and still come out break even or slightly positive.  

You want to have happy tenants, so you have a positive outcome and experience, possibly stand a good opportunity to retain this tent, rather than replace them in 12months, mitigate your long term risks now.