The fact they are complaining online might be an indication the property manager dealt with them properly so be sure to ask the manager for their side of the story.I hope this basic guide helps.

Richard,Assuming that everything was setup properly the 1099-INT will be issued to the 401k Trust EIN, not to you.

We are primarily hoping to get new homes but will not exclude used homes that are in good shapes or new buyers who will get the appearance proper in our park.  

You need, however, to learn how to structure these deals properly, use a qualified syndication attorney so you don't get sideways with the SEC or your state regulators, and to build a network of investors.Building the network of investors first is the critical step.  

If the contractors are opposed, you could look into creating a company, have the proper insurances in place (GL, workers comp,etc) hire them as an employee of the company, and negotiate a lower compensation.

I'm not entirely sure the product continues to be developed given their asset tracking still says "coming in 2017" but the site continues to operate so I'm going to reach out to the company to see where things are at and whether there's legitimate concern over the product shutting down. 

Is the SBA 504 the right product for what I’m describing?

You are talking about going into business with your best friend, so hopefully you would both work well together but you need to do proper planning to make sure it does. 

At the beginning, we were only plan to do quick rehab on a 2/1 but the finish product is a 3/2.

Still hard to find.I would warn you though, so many overpriced "deals" around here are sellers waiting on "california money"  (Out of market players who will accept ridiculously low returns, or no returns, or buy crap neighborhoods with no hope of appreciation).This 10 year run in us real estate is a by product of artificially low interest rates, so we are not sure if it is real!