Use the cash from your non-1031 sales to reduce debt on the replacement side. 

Remember, the goal of house hacking is to reduce your housing costsThe property must be cash flow neutral or cash flow positive at the current rents if you were to never move in.

But have since reduced it to $1250/month which is about what it had been renting for over the past year prior to me renovating it with all new flooring and a few cosmetic upgrades. 

Real Estate is a hard, financially uneven business that can and will cause a lot of stress on your marraige.

Sorry for the long winded response but this is my passion and I know how stressful it can be using the wrong property management team.

Obviously there is no equity to be had but it would considerably reduce the mortgage therfore at least giving me cash flow now.

You're sacrificing every single expense to try and make it cash flow -- which is bad news and will turn you into a stressed, unhappy investor.You think you caught a whale on your line but really you've got a tugboat.

By locking in our funding, we can eliminate one source of potential distress and we can also 'fix' one of our major expenses by locking in the financing rate Increase your cash position – there will be opportunities to buy distressed assets from people who were not prepared, but you will need cash Reduce Leverage – leverage can be used to provide higher cash on cash returns however along with leverage comes greater sensitivity to any loss of income.

It’s not easy doing both but if it was, everybody could do it.Build your team, get one deal under your belt, learn from that, make edits and corrections to reduce the mistakes and timelines, then go do more.

My advice is thus:- a less risky way to get your feet wet in this space is to offer to manage someone else’s unit for 10% to 15% as a way to gain experience - This is way less risky and way less stressful as you are not on the hook for the lease, utils, supplies etc each month- if you are a real risk taker by nature and really want to get into arbitrage then the most profitable unit with the least amount of risk is likely going to be smallest studio apartment you can find.