He is now selling it, and we have to buy or vacate.

As a person who is new to Real Estate and Real Estate investing, is it best to save up cash or do a cash out refi on your personal home to purchase a 2nd home (1st rental)?  

It pays to know the rules, what you can build, the busy times, and to run it well.

It has a good cap rate and everything was recently updated, head to toe.

With interest rates and prices skyrocketing, I believe this strategy has the potential to become a hot trend in our area.My plan is to acquire properties via seller finance or subject to, optimize it for this strategy and then repeat the process to multiply and increase income sources.

From what I remember they seemed to be a fairly small outfit out of PA. 

According to the IRS the vehicle needs to be used for 50% for business and needs to be "ordinary" and "necessary".Anybody who can give their expertise I would appreciate it.Thanks!

You would need to earn equity on the new property to be able to refinance and pull cash out.

Do I have to honor the lease currently in place?

Remember the LLC can be deemed worthless if you fail to operate your business in accordance with  with the operating agreement.