All my equity is tied in current property.Really want to migrate towards the house hacking strategy considering the way rental prices are climbing so quickly. 

It is simply not fair to them to tie up the property, make them think they've sold it, and then back out later. 

Make sure you treat it that way or you could be tied up in lawsuits and litigation and lose sight of why you even got involved in real estate

There is a tenant in the property who she says is being difficult.Not 100% clear on this issue and will follow up for more clarity but there is a vehicle which is underwater about 4k that was somehow tied to the estate by the tenant.

just google epa monsanto ties. 

Then keep bumping until you’re at your market and keep it there  You are tied to their old lease unless you get them to sign a new one with you. 

Due to a custody battle, all of our funds got tied up with our attornies, and our credit is not so good at the moment.  

It also allows you to present stronger offers to a seller since you won't need a financing contingency.

Is the Investor still tied to the mortgage?

I don't have to pay high-interest rate any points, I know 100% I will close and the seller feels much stronger about my offer when they see my bank statements.