Great idea - house hacking is definitely a positive direction to take and I've personally previewed a few really great house hacking opportunities in Los Angeles over the last couple of weeks.I'm a realtor in Los Angeles, but also an active investor/developer and so I would simply say that there are lots of ways to find capital for investment properties that don't involve your own property.

A HELOC is revolving debt but it doesn’t automatically involve interest-on-interest.

@Martin PennYou have assessed the situation correctly because it involves an actual danger that requires your attention.

A court that strictly follows the law would find for the plaintiff, whether they are landlord or tenant, when it involves serious lease violations.Suggestion: speak with the ex-tenant and agree to their demand for a full refund of security IF that would keep you out of court. 

Having someone help pressure-test deals and stay involved through the full process can make that first project a lot smoother

And by compliance, what is involved in that typically.

Since you’re looking out of state, it’s worth keeping an eye on markets that are still affordable but growing, like Columbus, Ohio, even though it’s not a traditional tourist hotspot—properties here can cash flow right away in the $120K–180K range, hit the 1% rule, and benefit from the city’s rapid population and job growth with big companies like Intel, Amazon, Google, Honda, Microsoft, and LG expanding locally, so there’s solid long-term appreciation potential.

I have been involved in a number of different size projects in the area in the last two years and all seem to work well. 

You can find people who toe the line and don't play games with you, moreover, you need to be known in the neighborhood of the rental as someone who simply doesn't play.I have had this done to me in multiple ways, often involving impregnation.

From a tax standpoint, being more involved can also help with tracking expenses cleanly and, in some cases, material participation if that ever becomes relevant to your broader strategy.Using a property manager makes sense if it’s buying you back time and reducing stress, especially if you have a demanding W-2 or live far away.