You best bet would be to a conventional loan to take out the equity to do the flip.

Your best bet it an accountable plan in which you submit expense reports regularly.

Taking that high(er) income and playing "arbitrage" into some other areas is a great bet.  

We would be more than willing to, knock on doors, help with renovations, perform administrative work, or anything we can do to give someone a hand in exchange for some real world exposure to the industry. 

On the contrary, the BP marketplace is a great resource to define a performing asset. 

Personally, I would think that free and clear (with cash reserves, of course) is the safer bet, but lower potential return.

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

An attorney may be able to find a way to prove the PM company has failed to do their job and is guilty of "non-performance".  

I'm looking to perform a 1031 exchange for a single family home that I've owned for 3 years for a duplex and I've come across some bumps, mainly financing bumps.  

Here's a great post from BP on the Questions to ask a PMI've always found that I need someone to help with the leasing but I can perform the day-to-day management remotely.