The husband has very good credit of 706, no late payments and is the primary breadwinner; his wife is a SAHM, has poor credit of 594, mostly due to late payments (some 120 days late) of student loans, some as recently as April 2018.

@Joshua SavageI guess that depends, will this be your primary residence?

@Kyle Murray -  Buy a new small multifamily as your primary residence every year or two. 

@Franka Hauck - You most likely couldn't put the rental portion into an LLC while keeping the primary residence portion in your name unless the property is split on the deed, or it is setup as a co-op or condo type situation.Keep in mind, the purpose of an LLC is asset protection.

Accessory apartments may be allowed, but often come with a requirement that the primary area of the residence is owner occupied.

Clauses used in managing the risk could be:- Additional Insured Status for you on their policy- 30 day notice of cancellation of any of the policies- That their policies be Primary and Non-Contributory- That their company Waives Subrogation against you- That they indemnify and hold you harmlessA good Commercial Insurance agent may be able to help locate companies that specialize in insuring that type of business.  

So only thing I see happening is you creating paperwork for the sake of paperwork. also, when you occupy a rental unit, it becomes your primary residence and you no longer can claim normal rental property deductions on the unit for the days in the year the property is not in service as a rental property.

If someone is willing to live with family or in a homeless shelter they could potentially invest near 100 percent of their income and certainly benefit more in the long run compared to owning a primary residence.

Have it be a primary residence burn also be in decent shape and come out ahead long term if it ends up becoming an investment. 

Presently, house-hacking wasn't on my radar as I already own my primary residence and even the cash flow if I eventually moved out of my house hack and rented out my unit wouldn't justify the prices I'm seeing in north NJ.