The requirements I read said it cannot have any agreements that put another company in control of occupancy, does that mean it can't be put in a property managers hands even if you occupy it at some point in time?

You may find it harder to have those kinds of conversations with your PM if you are not intimately familiar with all aspects of running a STR. 

@Tim Jacob couldn't be more correct...jury awards against landlords are rarely pleasant (think-who hasn't rented property from a bad landlord at least once? 

The temporary buy down programs would generally be where I'm leaning towards at this point in time as it will provide that payment relief until the rates stabilize in a better position for refinancing into.The only time I'd say differently is if you had a borrower with tight ratios for qualification purposes.

You only have to pay the interest payments w/ 1% interest and if u dont pay back in time, the interest goes up each month after.

At this point in time, I am trying to figure out what should be my strategy with this land since the market is flooded with new properties.

At this point in time, meaning 2/13/14, do not rely on a real estate attorney as most are not familiar with new financing requirements nor prudent lending practices, these are two separate worlds.

And the cash flow on higher end properties does come in time along with appreciation and rent increases ... most times they end up in the long haul cash flowing more than the C/D stuff because of this, and certainly with more consistency and fewer headaches as you've already seen.

I made an offer on a house, mortgage fell through due to not getting the documents in time.

It has many advantages over other entities as your business grows, including the ability to sell ownership interests more easily, take the company public at a later point in time, have non-U.S. shareholders, etc.