In general I would appreciate any advice in this endeavor, and any other help regarding financing as a first time home buyer in an owner occupied space in NC would be great as well.

However, in the event an owner has to be the GC of the project, don't pay a day rate to subs.

So look around, interview other STR owners so that you have sufficient information.

I proposed a couple owner financed terms to them and they returned with this one:Sale Price: $300,000 $25,000 Down. 3% interest. 5 year balloon. ($244K ish) This is obviously far better than any bank can give me with interests rates around 7.5% here non owner occupied.

Property that generates rent and that the owner has personal use of (your family member) can qualify as investment for a 1031 exchange easily enough. 

I go to look at a property Thursday with a contractor to do my own due diligence, the property the owner wants 45k with an ARV OF 90k-120k.

Is the 1st - year owner occupied negative cash flow worth it.

If I were to rehab it, could I refinance with a conventional owner occupied mortgage at the ARV in order to pull out my original capital?

It went all in on the crazy math of owner finance on used mobiles. 

All of my qualifying experience came from live-in-flips and building ADUs as an owner builder.Hope this helps and good luck to your husband!