Then, because that wasn't enough, they basically started betting on them and that compounded the problem.

Are we better off leveraging these funds to start our real estate venture immediately on a solid footing, assuming that in the long run (10, 15, 25 years) we will be able to compound and leverage our gains to build wealth far faster than we would waiting 5 years to save for an adequate down payment for our first property? 

I would say that the pattern is it takes up to 2 weeks for things to happen, and it all compounds, esp when dealing with vacant units. 

My first few commissions will earn me the ability to cut a full day out of my week to devote to RE which will compound into me earning more time for RE. 

beanie Doo is a great product let it sit over night black mastic will liquify use squeegee. put down sweeping compound etc down to absorb. use good commercial degreaser 80/20 this rinse clean water

That is, it's the same as it would be if you had invested the money in a savings account that pays X% and compounds annually.

Am I missing out on serious compound interest effects that will hurt me down the line, or is it smart to make sure I have the necessary cash if house hacking is the ultimate short term goal?

It's simply a compound of words, throwing emotion at it won't change a thing. 

If it's a standard Lakewood up/down duplex it probably has a plaster ceiling under the ceiling tile-- at least all the ones I visited when my son was apartment hunting were plaster.IMO, the "nicest" fix (assuming the old plaster is in poor condition) is to scrape off the acoustic  tiles and then drywall over the old plaster with a smooth finish; the cheapest fix, if the only problem is the one tile you pictured, will be to screw up the tile(s) that is/are lose, cover the screw with a little joint compound and then primer and paint the ceiling; If you are lucky the tiles have already been painted before.

In this realm of business, time is your friend, your money will not grow or compound easily without it, that's why I refused the discount points offer to lower my interest rate when I did my cash out re-fi.