I'm able to locate a hard money lender for the purchase and rehab, but the exit loan strategy is challenging.

Ones located in Greensboro Nc and the other is located in reidsville Nc the fees I see on this soft quote are: origination fee, underwriting/processing fee, 3rd party closing costs, 6 month tax impound, 6 month insurance impound, looks like 11-12k in fees alone.  

State/local are determined by your state of residence, not the state the property securing a loan you hold, or property you own is located in.  

How many beds and baths in the house and where is it located? 

However, before I am aware of all the project details, location, complexity and type of finishes, this is just an initial conversation placeholder.

"The house band located at the sink on the right side of the house, to the left of the front entryway, and along the rear wall is discolored and decayed in a manner typical of water damage.

Doesn't this hurt the tenants trying to move to a better location or larger home for their family? 

@John SteffenInvesting in house hacking or purchasing a primary residence for rental can be challenging due to affordability, vacancy fear, high interest rates, maintenance concerns, and location analysis.

Vet property managers well; income can vary greatly in the same location due to the quality of the property management.

If you want to form an LLC in the state in which the property is located, that's fine but single member is all you need.