That might be why they cant afford to give you as much lender's credit.

House hacking is the moset affordable way to start.

Assuming they have access to trusted and more affordable contractors and I don't have to manage the rehab (as much) it seems like a fair trade off. 

Very frustrating at times to see the damage they do.

@Erick Sembrano try the company floodsimple for coverage, they were very affordable compared to other insurers when we needed coverage on a 5 unit in a very similar situation.

I would advise buying a duplex in an area you can afford like Vallejo.

Also, but based on conversations with my CPA, it seems that classifying the property as investment rather than vacation will afford you an increased depreciation opportunity. 

Without the experience, industry knowledge and expertise, you might find yourself frustrated by the property leasing process.

I'm wondering, however, if that's my best first move, or if it makes more sense to keep renting and spend my $40K savings on a deposit for a triplex or quad in a place like Cincinnati where it's much more affordable and up-and-coming? 

But I’m right there with you - interviewing banks and looking for the downpayment terms I can afford but in Burlington, VT.