It depends on what the terms of your mortgage are.Pros-with no mortgage, you have higher cash flow.Cons-if you plan on buying more properties, you are better off saving the money for a down payment for your next place.The big questions are: can you get higher than 7% return if you invest that money elsewhere? 

The main condition was I had to have the downpayment (20%) first, close the deal, and then execute the owner financed 2nd mortgage. 

It's my understanding it's now similar to if it was a mortgage foreclosure.

Does the operational company already exist and have income history?

My name is still the only name on the mortgage and title.

Net Income post-mortgage: $75K/year.

Having a mortgage and your normal STR insurance is already 2 levels of protection. 

I am ready to talk to mortgage lenders and anyone who can help guide me on a financial plan to rebuild my credit and start a small savings to build up to my first house hack deal in Q4 this year in the Raleigh/ research triangle area. 

Net post-mortgage: $52,392/year.

If you have bank loan (not an agency loan) or no mortgage at all, an LLC is certainly an option.