Should I now go talk to banks about a conventional loan for "livable" houses or a HML for "non-liveable" houses to get pre-qualified (from what I have been reading, banks will not lend on houses that are not in decent condition) or should I try to get a deal under contract and then seek financing? 

But there are a couple of ways that the improvement costs could be rolled into a 1031 depending on your specific situation.

When I made the original offer I included a pre-qualification letter from my lender.

When I took our pre move in pictures, I took it in sunlight so I cannot remember if the bulbs were all working.

I was just pre-approved for financing and am beginning the journey by analyzing properties and setting up some visits today@Jeremy Pace@Jesse Peña@Chris Pasternak@Melissa Gittens@Gary Swank@Jerry Padilla@Helen Bollinger, by house hacking I was indeed referring to living in one unit and renting the other.

Your capital is unbelievably valuable, and right now you're not getting a great return on it.Normally I think I'd vote for you selling and rolling that into 25% down on a nice apartment building, but with your experience level I worry that could be a tough transition.But just remember before you go with a cash out refi or HELOC to calculate not just your return on cash, but also your Return on Equity.

I understand that there is a period of due diligence once you get the property under contract, and I was wondering if you guys would help by telling where do you find accurate information about rent rolls, property income, expenses, taxes, etc. 

If I were you I would be calling lenders right now and get pre approved or see what you need to do inorder to be approved.

I'm leaning toward rolling the dice and going with the $5,300.  

My guess is that rate (assuming its $390/yr) is a pre-existing owner policy cost and your costs will be higher, almost double.Now if the price you quoted is per month, I would not look into it further, as that is a very high cost.