Should I sell my house and rent until I find a house hack deal?

[Jon Tanner]

Ultimate newbie here, please forgive my ignorance!

In the past couple months, I've developed a strong interest in real estate investing. Here's our situation:

This past winter, my wife and I bought our first house for $230k ($35k down). Soon after, we had our first baby. My wife is no longer working, which means our monthly savings rate after expenses is only $200-$300. 

I am anxious to buy an investment property, but with only $29k in the bank and a slow rate of savings growth, I worry that we're just not in a good position to buy.

Here is my solution idea: 

1. We sell our current house to pull our equity back out and get at least $40k-$45k. That would leave us with around $70k liquid cash.
2. We rent an apartment month-to-month until we find a good duplex to purchase (ideally within 1 year).
3. We house-hack the duplex until we accumulate enough cash to buy a SFH for ourselves (3-5 years).
4. We retain ownership of the duplex and rent out both units.

In my mind, this approach could "get the ball rolling", considering we can't afford to buy an investment property with our current circumstances, nor would we be able to for many years.

What would you do if you were in the same boat? I truly appreciate your feedback.