Assume that the operating agreement states that the equity split from LP and GP changes from 80/20 to 50/50 after payback.

I could see how cash and fixed interest debt could hedge your bets, but also increase your operating expenses and risk in a potentially highly volatile environment.

Also, does anyone know of any good contractors who operate in the area who are honest and perform well?

If you are ever in the Chicago area hit me up and I will show you how we operate! 

With the Checkbook IRA LLC, the IRA itself is at the back end and simply owns an IRA for which you can have signing authority and operate out of a bank account of your choosing.Again, if the IRA will have equity in the flip, then the IRA is engaging in a trade or business activity as opposed to passive investments such as hard money lending or rental income.  

Not knowing your experience level, I highly recommend that path for the newer investor who is operating with limited free time but wants to get going.

On the surface it was great, but then we started finding out what was underneath.

No problems here.However from January 2016 until when I sell it, I will have no rental income and therefore operate at a loss.

The prevailing formula is 72/84For a park where the tenants pay water/sewer: Lot Rent x Occupied lots x 84 = Price at a 10CAPFor a park where the park pay water/sewer: Lot Rent x Occupied lots x 72 = Price at a 10CAPKeep in mind this formula only shows you what the potential of the park is under normalized operating conditions.  

Do you only like to operate in a certain area of MA?