I'm puzzled as I entered all of our info into both turbotax and taxact and got extremely different results. 

It is not extremely clear what you asked the bank for and were denied.  

I disagree with this first sentence but agree with the rest of Judah's post.There are three distinct  types of knowledge you need1) strategies2) how to evaluate a deal3) market knowledgeMany people who get stuck have a LOT of knowledge, but not enough in one of these areas to move forward.

I'd rather just go to the market and let people move in and if they see something wrong, I fix it without having to go through this extreme inspection period.

A chainsaw is a a powerful tool as well, and there are no restrictions on who can buy or use one, but common sense dictates extreme caution when using one.

The issue is that the home prices here are so high that it's extremely difficult to find a good cash flowing buy and hold property. 

@Matt Fisher A self directed IRA or 401k may invest in real estate in many ways, so long as the transaction is completed at arm's length.Clients of ours have held rental properties, flipped properties, engaged in joint ventures with other investors to hold or develop property, invested in tax liens, and operated as private lenders to other investors.There is a distinction, however, between passive income such as interest on a note or tax certificate, or rents from real property, and "engaging in a trade or business" such as being a wholesaler, developer or re-developer (flipper) of property.  

Modifying the lease will set an extremely poor precedent if another issue arises.

This is an extremely small parcel of land that the owner inherited from his dad, so he is letting my have it as long as I pay the $46 in back property taxes from the past 2 years.

However I do understand enough about the law to find it EXTREMELY unlikely that would be the case.