Unless you have cash, nothing about this is going in an LLC.

Keep in mind renovation costs will need to be cash aside from your down payment and closing costs - I'd create a healthy buffer here.

We are looking into purchasing cash and do some light updating but the county records shows as a 2/1 but the house is actually a 4/2.

Purchase price: $146,000 Cash invested: $42,100 Bought through hard money.

The obvious play would be for the low purchase price/cash flow. 

@Varun Hegde the guys who answered you will know MUCh better than me but I am lost and wouldn't touch this (I am not a note buyer) If I understand you are essentially getting an assignment of the rights to collect the payments, like buyiing a note.

(Remember, a loan is not a taxable event.)Given that mortgage rates are also close to 7% this won't boost your cash on cash returns much, but a higher percentage of your free cashflow will be tax sheltered, potentially all of it. 

when you have negative cash flow, in other words, when your tenant can't pay the rent and you have to make up any difference in cost because of it, that's called "paying the rent for the tenant". 

So many of my out-of-state clients from California are successfully purchasing flips, BRRRRs, and buy and hold deals here at a very cheap price point, cash flowing, and have tons of appreciation.

Pay cash for the property and the rehab, then do cash out refi.