I was looking at an attractive rental but it looks like the land value is 75+% of the value, so I would be paying a ton get very little tax benefit. 

To get a GM, we need to pay a GM wage.

The seller's LLC pays capital gains tax and depreciation recapture, while the buyer's LLC uses the purchase price as the new cost basis.

I'm assuming I would have to pay it off if I won the house. 

If the deal is right you can use hard/ private money to finance the home purchase and some or all of the repairs, then do a cash out refinance to pay off your hard/private money. 

They pay themselves good "salary" from the loans they get.

Option 2: We pay cash to build a small 2/2 cabin initially.

From what I understand, a 1031 exchange doesnt apply in this case, and so I will have to pay short term capital gains on the appreciation ?

This is significantly lower than the mid west in the US.A really nice thing over there is that rents are often payed once per year.Dubai have a very consentrated power and decision organ which leads to very low predictability.

Here's what I'd do: Create a Word Document or Google Document Titled "DRAFT: Life Vision" do not use a template, do not pay some guru for this.