My intent is to move into the upper unit renting out my single family home.

Perhaps, this time look to sign a shorter-term lease (say 9-months) with the intention of finding a SF deal (this kind of forces you guys to act quickly and not be comfortable). 

This was fully documented (& real) as both his motive for a cash out refinance (down payment) and her motive and intent to owner occupy. 

My intention is to do hard money lending and pay down the principal within a year to pay off the property and use the equity for the next deal. 

I was ready to foreclose if I needed to. 20 days to give notice of intent for foreclose and then post foreclosure for the next first Tuesday of the month(with at least 21 days notice).

Since you said your intention is to flip rather than hold it as a rental property, you do have less of a time restraint because with rentals, time spent renovating is time that you're also not getting rent checks.

Has anyone on here do a hardmoney loan with intention to owner occupy a house?

And as long as your intent was not to simply build and resell it would make a fine 1031.  

The issue is that these private sales get so much attention the seller doesn't have time to filter out the gold from the **** and doesn't give me the light of day.Is my best approach to write a Letter of Intent or straight up an offer letter subject to everything under the sun?

It's all about how you demonstrate your intent - past history, current practice, stated intent, unsolicited offer, correspondence with your professionals - all of these go to demonstrate your intent.