Do you want to self-manage? 

I think he is trying to find a way to help us buy a house since we are self employed without having to pay 20%  down payment. 

This is a great forum with very knowledgeable members that will help to guide you in the right direction.I really like the alerts feature that can quickly guide you to current topics that may be of interest: http://www.biggerpockets.com/alertsThere are a few self-contained guides that you can access here: https://www.biggerpockets.com/guides

She skipped out without leaving a forwarding address although she is self employed and we seem to have her correct P.O. box address for her and her business(business does not have a physical location). 

Here is a quote I heard from Hal Elrod “Your level of success will rarely exceed your level of personal development because success is something that you attract by the person you become”Here is my list of the top books that have made the greatest impact on me so far, and I would like to recommend:The Miracle Morning by Hal ElrodThe Book on Rental Property Investing by Brandon TurnerThe Book on Managing Rental Properties by Brandon and Heather TurnerRich Dad Poor Dad by Robert KiyosakiThe Compound Effect by Darren HardyBuy Rent Rehab Refinance Repeat by David GreeneMaxout your Life by Ed MylettThe Book on Tax Strategies by Amanda HanThe Five Love Languages by Gary ChapmanThe Ultimate Self-Directed IRA by Jeff AstorEnjoy, learn, and most importantly take action!!

Painted complete interior/exterior (mostly self, hired for some interior work), removed wallpaper (hired contractor), installed fixtures (self), installed new appliances (self), installed flooring throughout (hired contractor), and cleaned up and updated landscaping (self).

You are right, this is proposed legislation and our industry is actively fighting against the sections that would most negatively affect self-directed retirement account investing.

We have 2 loan scenarios: FHA with 3% interest rate and 3.5%($17,000) down BUT we have to claim $150k of income on our tax returns for 2 years and pay IRS 90K (2 years worth) total in taxes because we are self employed. 2nd scenario: private lender offering 4.5% interest rate with 5% ($27,000) down 8 year interest only loan converting to fixed thereafterwhats the wise choice?

A lof of out-of-state investors that try to self-manage crash and burn.

Do a 1031 exchange or invest with a self directed ira (Roth or traditional) or a solo 401kThose are other methods