Down the line you should be ok with proper pricing and rising rent over time.

I know I could have a family member co-sign a mortgage with me but not sure the best way to approach that conversation and what incentives I’d be able to offer to make it worth while for them other then their “familial duties” haha. 

Financing options do exist: hard money loans, renovation loans, and some traditional mortgages can be used on distressed properties if criteria are met.

I make around $110k+ per year, live off around $75K, have a mortgage ($1900/mo for rent, escrow, tax), around $40K in equity, and no other debt. 

With the COVID-era surge in home prices, rapid increases in mortgage rates, and rents not keeping pace, it really has gotten harder to make these deals work.

Obviously each deal is unique and requires proper due diligence. 

Friendly reminder that loan guidelines typically allow you to use the theoretical or real income from the other unit (the one you're not going to occupy) to help you qualify for the mortgage.

@Heather Bailey When house hacking with a separate rental unit, ensure proper insurance by obtaining landlord or short-term rental coverage tailored for Airbnb activities, in addition to your primary residence policy.

2.Are there strategies to reduce the required down payment or secure better mortgage terms?

Normal mortgage rates are in the high 6's now, for a personal residence, and higher for an investment property.