The seller is paying 20k in mortgage interest, given the current interest rates I would need to 45kish in mortgage interest for the said STR.

You still have a few options in terms of acquiring the home.If you own a primary home you could do a cash out refinance pay off or down all of your debts.

After pm forwarded my case (tenant did not pay rent) to collection agency, the judgement claim balance is $7,569.33.

We have $95k equity and our mortgage payment is $1400/mo to pay down an additional $174k on the mortgage. 

@Najeh Davenport so you paid cash but you still have the heloc to pay.

Sure the terms can be different as fixed and mixed rates can have up to a 2% fee for early pay down.

I have to pay $2000 a month on interest only.Do I need to get permits for all the work needed in it?

I've heard too many horror stories about people that pay cash for a property because they think they are getting a deal.A moron of an owner could see they could get a much higher price if they just put in the exit signs (etc) and then sold to someone with a bank loan. 

You have a week and you have the cash to pay all the debts?

You will also need to factor in utilities as you will be paying those and expect some tenants to abuse it (or not use them wisely).