Despite the house being operated for years by the prior owner as a STR. 

At this time the primary goal is passive income and then scale within 5 years as I gain more experience and network. 

As long as you're prepared to be a landlord and live next to your tenant for at least a year, house hacking is a great way to get started.

I had a tenant do the same last year.

He also used to be a wholesaler so when i find deals he will lock them up for me and send the contract hes been using for years to his attorney, and then he'll still pay me out for my work.

Quote from @Collin Hays: From a macro standpoint, cash flow is difficult when servicing debt, at least in the early years. 

There is another STR owner in this community I've talked to, and he's been doing it for 1-2 years and he said it's still been a real pain to deal with. 

Years ago I bought houses for $25k in my market.

Unless you are unknowledgable, my bet is you could make more from rent than sale, and still have the benefits of owning the original home while you go do something else.The 25K you have left in property will be netting you(gross) of $350 mo or 4200 per year.

I would offer to pay $600k to the seller but I would want a year to complete all of the entitlements and settle with permits in place and originate my construction loan as part of the settlement.