I am considering living in one of the units myself.

You could start by reaching out to any local corporations that do assisted living in your area and see what they are looking for (location, space specs, etc). 

I currently live in Olympia, WA (high cost of living, and not very landlord friendly state), so plan to invest out of state.

I've been living in my current house hack for ~1.5, and I placed my tenants in September 2023 (lease is up at the end of August).

I used to live in the city and the taxes and water bills are nightmares.

2) If you do owner-occupied cashout refi for best rate, you technically have to live in the home for 12 months before renting it out. * Some responders here may suggest not worrying about that and renting it out anyways.

Gutted the kitchen and dining/living room area.

You could bring less down and possibly have a lower interest rate since you will be living there.

This is where you live in one side.

As for the areas to target, my goal in getting our feet wet as real estate investors--and since we plan to be living in Sac--is to find a property we can live in while renting out one or more units to help cover our housing expenses, which we can then hold and continue to rent out when we move.