Most cities do not allow "boarding houses" and/or have a "no brothel" law. 

And yes, I know people will say "get her in contract if she wants the house and perform repairs" that would be the best scenario except At that point I was completely out of money.

Quote from @Nathan Gesner: Buying a house is straightforward; managing it can be a whole different challenge.

If you are going to add value to the house you might be able to get an equity line against the property to use to fix up the property or negotiate some repair money from the seller that you get at closing.

However, there is a mortgage on it with about 80k left, is it even worth trying to still go for this house or is that up to my buyers to see if they would want it still?

Me and my girlfriend are currently saving to purchase a home within the next year or so to start house hacking, my concern is how signing the lease option to purchase contract will affect our eligibility for first time home buyer programs? 

In terms of getting priced out here, what kind of house hacking strategies have you looked into?

Evict them, rehab the house, grab new tenants and keep it moving.

It's great that you are getting ready to take the first step to house/room hacking.

Good Day all,I have a property in Macon GA , a 1/4 acre of land with a house and a shed (brick foundation, wooden frame).