Hi @Christopher Morris House Hacking is NJ is great way to go. 

Since purchasing the home, housing market in my area has declined about 20%.

I'm a house hacker too, message me if you want to connect 

Cash out refi only if the rental income significantly exceeds the monthly payment and you want liquidity to invest elsewhere.2.You can maybe do a HELOC if you want a smaller loan that doesn’t involve refinancing the entire house.3.

The front end can sometimes be tedious to get approved by the local housing authority, but rent payments are always timely.

What do you do when in house goes on vacation? 

I work for a local house flipper in the Greensboro area (Winston Salem).

A "lake house" might be in a residential zoned area where a commercial use would be prohibited or at least require a variance (approval) to make an exception.

Good luck  Closing of the house was in late September.

How much will you spend in repairs on a 1920's house with renters ?