We are desperate to lower our monthly living expenses and are currently saving in hopes of being able to house hack on a MFR when our lease is up in December through an 3.5%FHA loan.

I would have saved myself a lot of headaches and money by doing a background and credit check on existing tenants.

However, you'll only be pushing off the taxes on the appreciation, so even if you were actually saving the money, it would take a long time and a large amount of appreciation to outweigh the costs associated with selling and buying. 

It sounds affordable and useful, and can save that much in a month or two safeguarding flips against bad contractors.

I am sure you are saving a lot of money on rehab costs without hiring a contractor.   

However, I am finding through my talks with some lenders that, since I am still relatively new out of school and have multiple student loans (although I have great credit), my saving grace in terms of getting a loan to fund my first deal is the salary my day job pays me.I know that real estate isn't a get rich quick scheme and that I will probably have to stick out my day job for a couple more years, but at what point do you see banks, lenders, etc. start to give you loans to fund deals without a steady stream from a corporate job? 

Justin, You can rollover your 401k into self-directed IRA, but not into HSA, which is Health Savings Account and not a retirement plan.There are several reputable providers here on BiggerPockets who are active on the forum, just search the forum for related keywords and you will find out who they are.

My plan is to use that money for the down payment/ closing costs and use savings that I would have used for that to pay for rehab costs and ideally speed up the process for the down payment on my second home and turn my first one into a rental. 

I haven't read this one, but have heard it's a great book for new people.While you're learning, start saving some cash. 

Should we start with a flip to build up our savings?