I foresee it becoming a hotbed for medical professionals and chapel hill residents migrating there for the tax benefits and roi on selling their chapel hill homes and moving there....

The owner has not had good experiences with tenants and does not want to offer financing/sell to an investor since he will still be tied to a rental situation through this financing.

Oil companies may also have a tie in with the equipment lease.The absolute best situation is to own the real estate, own the operating business, own the equipment, and have no long term contract with any gasoline provider, in a heavily trafficed location with no direct competition, and a high volume dealership.  

I work with a commercial lender that loans based on the property, not your income (no tax returns or W2's). 

My wife and I are in the starting stages of building our dream cabin on some family property situated between Black Hawk and Rollinsville! 

They don't seem 100% sure of this but say that it would be easier as I would have a federal Tax ID with an LLC.  

How should we go about doing this and how should we record rental income for the first year and record taxes?

However, you may need to discuss this scenario with a tax accountant to determine any tax advantage you may get using a land trust in this arrangement. 

I'd love to talk to other people in a similar situation or experienced REIs.

Boarding lots of pets is a different business model than human residential housing.Sorry to hear about this situation.