We were just not looking to buy RE because the rate was lower than current market or the leverage was a little better that's a fools errand . 

If we were running a cap rate on these you'd have a worse return than just going and getting some CDs from your local bank and YOU would then have the fun of dealing with tenants paying less than 50% of market rates (assuming your numbers are correct).There's no deal to be had here unless you can bring her down significantly on her ask.

House hacking is tough to break even with in year one (with current house price run-ups and interest rates) for a couple reasons:1.

It would be helpful to know about a few, in my quest to find the best rates.

Each class has different tenant pools, appreciation, turnover rates, etc.

It feels like a slow rate of growth but it is working for now. 

One thing I would look into is tax rates for the commercial property. 9 times out of 10 hotels are taxed at a higher rate than residential.

Typically the rates change depending on if you are occupying the property or not.The reason most people talk about house hacking is because of the benefit of lowering your expenses. 

We would have trouble cash flowing if we were to do a cash out refinance with the current interest rates.

Almost any $65k property in a Midwest city is going to be Class D or need $20k+ in rehab.Class D means you'll only get the worst tenants, who have a high rate of eviction for nonpayment AND they trash the place on their way out.You MAY get lucky and get a S8 tenant for your Class D rental, but most of them will want to live in a better neighborhood.