This means instead of getting a mortgage from the bank, you pay the seller in installments.

Not all banks will do this.

This formalizes the relationship and segregates the rental income from my personal income.Banking and Accounting:Separate Accounts: Open a separate bank account for the LLC.

Both an IRA and 401k can leverage with a mortgage, so long as the mortgage is non-recourse - meaning no personal guarantee from you.  

Purchase price: $116,000 Cash invested: $25,000 Personal home that will become a rental once fixed and updated or will be used for HELOC to purchase other properties on/off market at that time.

I would stay personally liable for the mortgage. 

Personally if someone breaches a contract with me I will often go after them.

Personally no, but it's just something I don't like to deal with. 

I do not have any LLC, was thinking to close in my personal name.

Because liability insurance + homeowners insurance + separation of finances + taking care of my property and tenants + being leveraged (the bank owns the house and anyone that might sue me will be in line after the bank) = a fine liability strategy for an investor starting out.