I just feel overwhelmed with picking the correct path and right direction to head.

When the market corrects, then I will buy

@Wayne Brooks is correct, you need to get a COI from the insurance company of anyone you hire.

Ian Collins If I read this correctly- the 3 unit property you will live in one unit and pay nothing as the other two units provide $300 cash flowIn calculating your return you calculate actual $ not what your not paying.

If there is additional costs associated with the correct insurance I would roll this over to the tenant.

I think the best place for you to start is to continue to educate yourself through the different programs/blogs/articles on the BP site relating to house hacking, including the different financing methods (e.g.

Is my understanding correct that if they choose to replace it, they must abide by useful life calculations (its 4 + years old)?  

You can start smaller (6 to 8 units)  and work your way up.Screening in a strict but responsible process that will help you with your occupancy rate percentage when it's done correctly.

If you foreclose on your mortgage  you cannot correct any title issues that precede the recording of your mortgage.

You are correct - if you don't stay for the two years there will be capital gains to be paid.