Are there other savvy ways for funding this project?

Also control the draw funds pay the subs directly and get lien releases ..

2) Quote #2 is too low.

If I were to open up a separate real estate bank account, I would then have to add funds consistently from my W-9 job - which in my opinion begins to blur these two accounts together anyways.Should I still open up a separate account for this first house hack, or wait until I buy the 2nd property, which would provide consistent cash flow that will go directly into that account?

Well, it's boring if you don't like scuba, snorkeling, boating, swimming, fishing, the Mayan ruins, Xcaret, riding around in golf carts, a marina, Dolphin Encounter, etc. in a very secure, safe environment that has a very low crime rate, and is constantly patrolled.

Fortunately with the rent/mortgage ratio we would be fine either way due to the low rate, but certainly something to keep in mind if different lenders have different standards. 

Low HOA fees ($1000/year) and close to the mountains and casino.

Note: I did have one client declined by them because they had two past home insurance claims in their history so it seems they are looking for low risk clients only. 

Sellers still owe 71k  which I have the funds to pay off but the catch is, they obtained the property with seller's financing.

You funded the spec build, and GC agreed to a cost + % fee arrangement.