do not use a line of credit for a down payment. 

I'm a realtor and investor in Indianapolis and happy to share some insights tailored to your questions.1.

I recently came across 1 acre asking for 314k in a very good residential and growing location, so the current owner has added 4 manufactured homes with 4 electrical meters, 4 septic tanks and only 1 water meter for all 4 homes, the homes are sitting on partial slab and partial pier & beam, he also added 2 storage sheds approx. 380sqft with the intention to make them ADUs they are still only the shell so I would have to get those ready to live in, so currently the 4 manufactured homes are being rented and bringing in 2800k a month, 3 of the homes are needing some TLC which could increment rents and possibly get me at 3600k a month, also being a 1ac lot this still leaves about 12,000sqft of raw land where you could build etc.So that is on the good side now the things I did not like so much, the lay out is poorly executed to where it makes it looked crammed up and not professional but it could be fixed.Another is that in reality there is only 4 livable units so that qualifies under a conventional loan but since they're are 6 units on the property the banks are wanting to take it as a commercial so we would have to move out the 2 storage sheds out in order to close as conventional.Another concern, technically you are only allowed to have one manufactured house or single wide in your property according to what I know but I know it could change according to zoning which I will investigate, so my question is has all this been accounted for and if so how can I verify it so it wont leave me in a bind further down the road, I currently asked my agent for the appraisal of the property to see if that might verify.Any recommendations?

I think it's a great strategy.

Contractors play such a huge role in real estate projects.

RESOLVE this issue NOW and make a clean break. 

This is the first time I've heard of such a thing as a land swap, especially between a municipality and a private entity.

I have over 30 years experience in operating office buildings in NJ and would be will to run the operating arm of these investments for a % of the deals.

I'm having a hard time believing that as I've never seen one installed like this. 

I had a heart-to-heart with the contractor and made it clear what our expectations were and no more money (he was asking for a second payment of a three payment contract) would come his way.