Ideally, we would all purchase an investment property together.

If that is manageable under most circumstances go for it. 5 year balloon not ideal, but essentially you are replacing a 2 year balloon (hard money) so you are safer.

In the most ideal scenario my family and I can stay in our house and have enough for a down payment on an investment property. 

Ideally, we would continue to live in the 2bdr and rent out the other two.  

Investment Info:

Single-family residence fix & flip investment in Lombard.

Sale price: $635,000

This was a house that one of my investors bought and rehabbed. I added the before and after photos

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I am ready to purchase my first few properties in Chattanooga.I travel to Chatt fairly often but would like to have a more solid feel for the area in terms of where to place my first investment, I am currently looking in Red Bank.Though I don’t plan to rent immediately..I will likely house hack for a year (ideally with a MIL suite or basement) and rent it out afterwards while I then focus on getting a stronger foothold in wholesaling.

Join me at The Sloan's Lake House Hacking Meetup https://meetu.ps/e/KtKly/PFlmT/i

This sounds like an ideal situation to use a hard money lender and leverage your capital. 

My R/E agent has been pushing me to sell the property b/c he says the market is hot, rates are low, and demand is high.They suggested an ask price of 2.7mm. 

Ideally it’ll something that will be easy to self manage and convenient to get to.