We make a base salary of about $80k (with overtime $110k) If relevant we do have $150k in 401k, $100k in equity in personal home, and $10k in savings. 

You'd have to create a basic spreadsheet that will calculate your debt costs on a property that will yield you 9% (net of all other expenses). 

Focus on a base hit.

Background: My wife and I live in San Jose, California, where we are renting a basement apartment from family for a great discount.

Every property management software handles this pretty well.Honestly, with four units you should be able to easily track this with a basic spreadsheet or even a pen and paper.

@Chandirasekarendiran AnandanYeah, I know this is not always true, but if I see one partner not being on board with house-hacking, it's usually the woman, for obvious safety reasons.What do you think about a home with a basement that has a separate entrance?

You don't need to know everything to get started; you need a foundation to build on and the rest will come through experience and then refining your education.You can build a basic understanding of investing in 3-6 months.

Worst case scenario I'll buy a basic new one in a few months for $300-400 if it still stresses her out and just raise rent $40 next year (which would just be keeping up with inflation anyway) to make it back. 

It is a basement unit and I've had sump pump smell issue when there was heavy rain, which is pretty rare in Denver.Also looking for any suggestion or experience around this topic.

Get a real estimate from a contractor. that being said there are plenty of bad contractors out there but they are easy to avoid with a basic contract and good judgement on their character.