The choice depends on readiness, experience, and long-term goals.Good luck!

In some cases the cash flow may interfere with a choice so we go with the property with the most equity.

Yes, it could be the signs of a certain personality defect, but it just as likely could be the sign of a young 20 something being "young n dumb" making poor choices. 

Rainier.There are choices, but personally I don't think cashflowing there is easy. 

For example, I am a little concerned about some aspects of the business cycle recovery and a potential for a double-dip so I lean toward the safest part of capital stack which is debt (or low-debt equity).

Of your choices, #3 makes the most sense, but it doesn't have to be a house hack.

Commercial and multi-family real estate are great choices in Houston.Good luck!

I've established a very stable  I've determined that local properties should be my first choice and by local I mean within 1.5 hours of my primary residence.

What is stopping you from simply getting a mortgage and doing it the safest way to protect you and any issues that might arise. 

You could have made the choice to capitalize them but likely not.