The small markets won't appreciate much but cash flow well.I'm not against house hacking in the bigger markets either, but my hometown market seems very profitable cash flow-wise.

There seems to be a mis-understanding about what ESCROW accounts are. 

Their commercials seem higher quality than the no on prop 33 commercials (who have similar budgets but from much more sources).Hopefully voters educate on this and strike down this proposition for the third time. 

So far, I have two people who seem they could good tenants.

@Gabriella Swan, with your management experience already in place, house hacking seems like a perfect entry into real estate.

You’ve found the property you like, and the numbers seem to work, but it’s more than you can afford or want to pay.

I would outline your scenario to a few local mortgage brokers - with everything you've said this seems like a pretty easy deal. 

Most investors seem to want to use leverage to boost returns. 

Smoky Mountains seems to be a solid choice but I wonder about oversaturation and competition in that area?

i also had HVAC mystery issues in my first duplex when we house hacked it.Regarding the Daikin Mini Split - I have one in the 3rd story of my current home and it seems to work great for us.