Finally from a purely from a cash outlay prospective short term, you could rent a house with roommates and your payment would still probably be Lower than house hacking because rates are so high, over the long period 5-10 years obviously it would cheaper ti buy, hope that makes sense 

Im self employed, roughly make $130k gross anually, 1099 NEC , no debt at all, 740 credit score.  Want to get a loan for $250k in AZ

Just a heads up this will not be tax free, it will be a pro-rated exclusion.

Finally, what’s the rate of return for alternative investments? 

Finally, even with a substantial discount, the house may not be worth it.

Looking at a property that would be a somewhat turnkey STR, it has great numbers and occupancy rates.

We cap the rate for utilities and actually added about 10% above our normal average this past year due to rising utility costs in our area for gas and propane.  

I understand they have a little bit higher interest rate, but what are the risks of DSCR loans?

Owner-occupied commercial properties generally get better interest rates and terms when compared to pure investment properties. 

2. don't use an appreciation rate.