Using equity from my primary residence and then the 2nd mortgage approach will obviously increase my debt. 

First, check how often the HOA dues increase. 

Current situation I recently moved back home with my mom to increase my income and pursue my education full time ...

On the other hand, by house hacking you may achieve the same living for free scenario or let’s say that you are $100-$200 out of pocket, but you will also benefit from principal pay down (you gain equity with each mortgage payment), tax breaks, inflation (each year your rent may increase, while your mortgage payment stays the same), and appreciation (maybe).

Use your cash to invest in a different property and increase your cash flow and assets.

Tenant lease was up and I needed to renew the tenants lease with the increase.

A property can only actually increase the cash flow it puts out one of two ways...either increasing rent or decreasing expenses.

Sometimes it can blend higher over time with rental increases or buying bigger type properties where the cap rate purchase is higher.  

If I add in rent income, it would not be enough (because rent income is about $300 and mortgage is about $500 per month (with tax and insurance)), it would increase debt to income ratio). 

‘Hidden factors’ that increase valueFrontal curb exposure - is your house narrow or broad in comparison to others?