Your dilemma is exactly why I took my properties back and developed a software to simplify management so I can do it myself. 

How do I identify a contractor as a solid guy without knowing anything about it?

You may also hire licensed contractors and sub contractors as the owner of the business/property.Not in Oregon you need a license to flip houses.. its called a developers license..

If so, are there any areas to avoid or areas which are being developed?

Child would like to buy the house, potentially for below market value, retain the original real estate tax basis and then parents would like to use the proceeds from sale to complete a 1031 in order to defer capital gains.I can see a few potential issues:Does the fact that parents converted it to a rental from primary residence cause a problemIs a purchase below FMV possible or are there 1031 ramificationsIf below FMV a bad idea, could some sort of non-interest bearing note be structured between the parties to make up gap between proceeds and FMVCan 1031 exchange property they identify be contributed into an LLC after closing for asset protectionAny advice on the structure outlined above, or other ways to transfer real estate from parent to child (while parents still living) would be greatly appreciated.

With all these new developments there is also quite a large scale apartment development mid way through completion.

However, maybe I'm not thinking deeply enough.What other ways could investors approach a development of this size?

My primary job is land brokerage for new development, in fact I’m working on deals in your area: San Dimas, Glendora, etc.

The reason you are seeing so many for rent/lease signs is due to how over built the town is now because all the student housing developments. i.e Parkwest, Aspire, The Barracks etc.. 

I'm working towards buying a house hack in central Florida, but the handful of properties I've identified as possibilities are all already rented out.