That means either you won't cash flow or your Return on Equity (ROE) will be terrible.Since this is your primary residence you'll be exempted from paying capital gains taxes when you sell.If you sell to your parents, it will be considered a non-arms length transaction and will get closer scrutiny.

Out of pocket is closer to 3.5% than you think!

Based on income alone, I could buy a 30k lot in sky harbor and build a 2 bedroom 1,400 sq ft cabin that generates 50k to 60k in rental income all day long (if not closer to 55k to 65k).   

I am not much closer that I was a couple weeks ago, but the more I talk with people the more confident I get that I will get there, and you will too in time! 

I’d recommend focusing on affordable areas closer to the city for house hacking to keep things manageable.

Then you should be able to narrow it down to a closer date afterwards.

Now I am interested in growing a little into the single family realm in a neighborhood closer to my home.  

I’ve been raising rents closer to 10% for the last few years and 5% is the lowest I can remember in the last 10.

Typically  issues are raised when the exterior is not kept up with / parking on grass / garbage in neighborhoods where everyone takes pretty good care of their homes.If you keep it clean and run a tight ship, you should be okay most of the time.

As long as all the rooms are decent size with closets it could work and you could get closer to what you want in rent.