You will still be much lower than  new build.And faster too, and as we all know  - 'time is money'....

House hacking is a good idea and will help cover your expenses.

This effectively means that I don't need a primary residence at least for the next few years and my living expenses are practically 0.

It's 2 properties, single family homes, in the SF Bay Area.Sharing some details that might help inform the decision, let me know if anything else would be relevant.One property fully paid off, generates between $20-30k in profit after expenses (property taxes, hoa, insurance, etc).The other property is our current primary residency and would operate at a loss of about $10k/year.I plan to travel back to the US at least once a year, could that be a deductible expense with an LLC? 

You need a DSCR lender with a lower seasoning period.

In our situation, if the loan gets called it doesn't seem like it would be a huge problem, as we could just pay it off and the list the property and get the equity (probably $30k to $40k after selling expenses, assuming the market hasn't dropped).Thank you in advance for any feedback anyone is able to provide on the subject of a subject-to sale with a USDA loan.Jean

Rather than taking out some boot from your sale to pay off debt, you could take a detailed look at your financing math after buying a new property and then strategically refinance to replace expensive debt with cheaper debt, but this is not very easy in today's rate environment. 

Is the $1500 income the rent or the cash flow after properly allocating for expenses?

That also does not account for any other expenses, such as vacancy, make ready, PM, lease up fees, and reserves for maintenance.My suggestion would be to look for homes that are further north or east where you can likely get a better price and higher rent....Anna, Sherman, Celine, Van Alystene, Aubrey, Cross Roads, Little Elm, Denton, Forney, Princeton....Lavon.

In SFH neighborhoods with HOAs they are generally lower cost and keep the property values up by not allowing "yard art".