You and your legal, tax and financial advisors should review this transaction in greater detail, especially the PLRs, to ensure you understand the significant risks involved and are structuring the transaction as close as possible to the PLRs to mitigate some of the risks.

Aside from strategy you must understand how to underwrite a deal. 

That’s okay—what’s important is understanding the "why" behind your investment decisions.While your accountant’s suggestion is a great starting point, make sure investing aligns with your own goals and situation—not just because someone else is enthusiastic about a particular strategy.

My understanding is profit from lending is considered "taxable income" and is therefore added to your income and subject to your normal tax rate after all deductions, etc.

So, you're actually making the argument *against* debt (not for it).I think you mis-understand debt, risk and the alternatives.

But consulting with the town would be good to try to understand what they're permitting process is like.

The only way for you to understand the situation and evaluate your options is to ask a lot of questions.  

Investing OOS for the first time, and using a TK provider for the first time.I understand I'll be paying (significantly) more for a TK provider home.

All well and good to dream big, but you need to understand the practicalities and probabilities of getting the deal to closing. 

I understand if you don't want to do that.