To offer my own opinion, I'm set on saying a house hack it too risky and leaves you living in a lower quality home compared to the size of your loan.

Lower your numbers and decrease your risk.This might be to low for a bank to invest so maybe look for a  property around $100,000 kicking off $1300 in cash and you will be happy too.

typically places with great historical appreciation have higher entry cost and lower cash flow.  

So here is the timeline..2015 - bought duplex for 455k with FHA2016 - did shotgun refinance to lower my interest from 4 to 3.252017 - fins out I have shortfall and my monthly payment had increased.Here is the LA county tax info: AIN: 5188-016-029 

Every cost they sent was right-on the $$$ or lower than expected.

It's definitely a product that has a limited timeframe.

You are simply much less competitive when you need to lower your offer by x amount to take into account all the fees on the loan...

Like most things in life, it's a double edge sword.Buyers benefits include being able to negotiate terms, lower down payment, not having to qualify for a loan with a bank (if you have issues preventing approval).  

@Carolaine S.I would definitely consider selling the coop and look for a multifamily in a decent part of the Bronx or lower Westchester that would work for an FHA loan.

I'm no "pro" as well but I've listened to a lot of buyers in your situation end up in Option #4: Walk away for now and in time they may come back and accept your offer or in some cases accept an even lower offer.