This minimizes the income tax you pay not only within the first year, but future years until your income exceeds total renovation expenses.

Is there any way of having that property owned by an out of state LLC and not paying the franchise tax for just one property? 

If you were to rent it - right now maybe $2500/month - does that pay for your expenses + profit? 

I do see alot of people searching for STR'S with private pools.I also see people buying multiple pool cabins, so they absolutely seem to be paying off.Many of these are indoor heated pools that can be used year round.

If and when the closing date specified if 4/1/24 comes and goes and the buyer doesn’t pay or show up, is the contract then null and void?

You can always refinance and get the equity out without paying taxes on the money if that's what you want. 

I understand that this money is borrowed money, so I dont want to have it locked in a deal for a long time and pay the interest payments.

That means you can never take cash out again unless you pay it off.

Do I have to pay that as well?

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.