For buying a second house, should I declare high taxes again or save for a 20% down payment to qualify for a loan based on my active income, without needing tax returns?

I'm trying to figure out a strategy on buying real estate from the seller (no lenders involved) on payments, adding value and reselling it for profit and thus, paying off the original seller.

Usually wholesaling works best as a side venture while buy/hold is the main focus.

Yes, you can buy a STVR in your retirement plan.

Could you buy another house hack instead? 

If I sell a single family house for $1 million which has a mortgage of $100k, can I do the following: I buy a single family house property using 1031 exchange for $1 million and get a mortgage of $700k .

If you are confident you can re-rent it within a certain time frame, you might offer to let her buy out of her lease.

This gives you the financial resources to buy your next property or two.  

I'm trying to figure out a strategy on buying real estate from the seller (who owns the property outright) on payments, adding value and reselling it for profit and thus, paying off the original seller.

I'm used to purchasing property all cash, but I want to buy another property within the next 2 months without waiting until I have enough cash to purchase because that'll be another 1-3 years of saving.