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.

Compound that tax free over 20-30 years and we ain't talking chump change.

This will diminish the short term benefit as you would pay full taxes now on that contribution, but 12% growth compounded over 25-30 years would be a really huge pile of tax-free money from which to take distributions in your retirement years.

I would guess the money moved to the end/user distribution & boutique products - oils, edibles, pain reducing compounds, etc.

With proper strategies, you can use the tax-sheltering benefits of such a plan to compound earnings over time and build a significant amount of wealth to draw on in your sunset years.Self-directed IRA and 401(k) plans are not for everyone. 

Once you start stacking, it's like a compounding effect to your state of mind.

I had to get drywall compound on all seams-Closet bi-fold doors were off their hangers -Front door needed some more weatherstripping to seal out cold air.