Depending on the location (how far from the city) your house is most likely invaluable now since most of new construction is being built more in the Long Island area (Great Neck).I would keep the property and find another way to finance your next investment.

I'm in the same stage you are...although my wife and I are meeting with a turnkey provider tomorrow to review the properties they manage (getting to see work under way and finished product) on the South Side of Chicago.We're down in Shorewood and my wife still works in Bolingbrook..so same neck of the woods!

Eliminate outstanding debts/save money and keep working out the flabby financial muscle part of my brain!

I would recommend for your first deal that you scrounge up the $35K and buy it all cash so that you have the confidence to take your time and make some mistakes without having an HML lender breathing down your neck!

Pretty much uncle sam is not going to risk its neck out for properties or condos.When looking at a property, I think about: can I cook my dinner inside the property starting from day 1?

@Derek Curtis You are in the midwest so I would assume the following statement is true for your neck of the woods: There are less investors in that price range($300K+) and even less retail buyers.

Before jumping in neck, deep you should think about your attack and exit strategy.

OK BPersCurrent situation - Personally need a new place to live - Want to keep house hacking (own one 2-Fam which I currently house hack) - Not having great luck on the MF market in my neck of Massachusetts - Seeing potential good deals on SFHLooking into buying a SFH with a basement / garage / shed Anything that I can turn into an In-Law and live in said in-law while renting the main unit.  

Fairly well accepted SOP in my neck of the woods is to only share low appraisals with the other side, and otherwise simply to state that the appraisal "supported the value."

Curious @Tony Silvas, what would is cost to simple rebuild 660 Sq Ft in your neck of the woods?