Structuring a deal from family as a owner financing

[Jacob Scholes]

I'm looking into purchasing a duplex from my parents. I had been looking into buying it from them next year on VA loan, and they would do a 1031 exchange to buy a new property..

since we have an uncertain future with interest rates and the election i'd like to purchase sooner.

My parents mentioned we could look into owner financing by doing a cash out refinance and putting my name on the loan and paying them our downpayment separately. We would refinance in the future to get the loan in our name alone.

This would give them more time than allowed if they had to do a 1031 exchange because it has been hard to find deals in utah right now.

Would they have to pay any taxes on the equity they finance out of the deal?

Has anyone else done something similar or can offer any advice?