Typically 75% of rental income can be applied towards your DTI for qualification. 

My goal is to leverage that equity for additional income.

Personal guarantees are EXTREMELY common.

Jimmy,You need to show (2) years of 1099 SE income in order to use FHA, or traditional financing to get approved for a mortgage.

I know there's seller finance and "B" lender that are good for the short term, but if a balloon payment is due say in 5 years, there's no guarantee that my DTI would be in a better place then I'd be stuck without funding. 

If you are sole member LLC you just take a distribution from your business account to your personal account.You are likely already reporting the income on a schedule E.

Then there’s this glorious tax season where you realize how many things you get to deduct that others can’t, while sheltering your income with depreciation, and earning tax free income with appreciation.

Last thought (mainly for future readers), you may be talking about the 1 year FHA history if you have variable income.

There will likely be a partnership return required where you flipped a house with a partner and lost $120,000.If you sold the other property within the same partnership, it will also be reported on that partnership return.The net result to you is that you will receive a K-1 showing your income / loss which you then use to report on your individual return.If you made no money within the same year, you likely pay no additional taxes / get no additional refund.Best of luck.

If your goal is passive income, it's not going to be in New Jersey when you factor in cost to purchase, management costs, and rent to price ratio, but what you can get is steady appreciation.