As a house-hack the lender is making the loan to your buddy personally, so splitting ownership to give you beneficial interest doesn't work smoothly here. 

Is selling a sole ownership property and buying a co-owned property allowed for 1031 Exchange? 

We also have no land transfer tax, or rent control, which is a big advantage in multifamily (5+ units), as you can improve the property, raise rents to market value with only 3 months notice, and suddenly the building is worth exponentially more.

Note that when you transfer a property the taxes will be reassessed.

Because at that point you transfer the title and then after a few years you have enough equity built up that you can then go and refinance it with a bank.

The good news here is this:  there are good provisions in lending for sales and transfers within a family that create a beneficial situation for all.If the loan balance is small enough then you may be able to purchase it from your grandmother using the equity she wants to give you as part of or all of the down payment. 

@Kelsey Mortimore I’m doing a mixture of both, trying to keep some cash in reserve but also staying active and still doing some deals here and there to keep some money at work and especially keep a pulse on what’s happening in the market.For your first investment though, I believe the best time to start is “now”, at any point in the market cycle, simply because you have to live somewhere and there is a lot of virtue in just getting started and getting over the “first deal” hump, overcoming “analysis paralysis” etc.I’d recommend taking some time to “digest” your first deal though and acclimate to all the joys and responsibilities of house ownership, before rushing on to the next one.

That costed a lot of money but I was so busy transferring out of the military and organizing my move to the West coast that I didn't want to deal with it. $12,000 laziness decision.

You’ll definitely want to make sure to notify the Housing Authority about the change in ownership so they stop paying the current property owner and start paying you once you take over.The exact process will likely vary slightly by each Housing Authority.

This might reduce your $2300/month payment, providing you less stress and, hopefully, a little more left over with which to pay down your car and student debt.I also agree with the previous poster who pointed out that rent in your area won't be much cheaper than the cost of ownership.