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.

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 .

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

Verify this information with a local broker or appraiser for extra protection.

Many know local dealers and I'd much rather buy from them whenever possible.

If you’re looking to take extra cash out generally this season requirements start at 90 days, some lenders are six months.

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.

Two major differences here are:  (1) most "investors" in the mid 2000s  we're not buying for cash flow.