There are some basic questions missing. 1) Is the land within the City limits?

You've traded 'asset protection' for limited financing options.If you don't care about getting spam e-mail the rest of your life, try lending tree or quicken/rocket mortgage maybe just to see.

I have no clue as to how good it is or is not or how much it may cost.although I have been around a lot of different HOW TO guys over the years.. and like anything.. if he sells 100 people on the big dog program 10 or so will take it and run.. 10 or so will muddle the rest will just kind of fade away.you have to look within and see if you are in a position to succeed in real estate... its not as easy as just taking a course and your now going to succeed... real estate generally speaking takes time,, money and some how gain experience. so for sure those that have limited investing capital limited experience.. no real contacts in the industry.. will find it pretty tough to almost no way anything will happen other than get jacked up at the event.Assess were your at personally.. 

Things I thought I had to depreciate was expensed.In your case, your deductions are also limited by your income, which may explain the difference of net deductible loss less than your net loss.

Ideally, I would want to use the money to invest in real estate, but My investment options are more limited than if I had a self-directed IRA.I do not want to invest in stocks.  

That's a rough story with your GC I bet that's a common story.

I joined BP because it seems to be an education and mentorship style site.My Full schedule limits the amount of time I can commit to real estate and think I will do best with turnkey rentals.

Trying to buy as an owner occupant, leaving your family behind to live under a separate roof, strains the limits of credulity.

Is there any way I can limit the risk?

FHA has a limit up to 6% of seller concessions based on the sales price or the appraisal price, whichever is lower.Seller concessions have to be approved by the owner because the property has to appraise at the higher value.An example: $100,000 with 1% seller concessions.