Buying retire parents home

[Warren Lacsina]

Hello to all. I live in Sacramento and have a long-term rental and a primary residence. Look to get a second mortgage vacation home in San Francisco. Just needed some advice on my parents home they want to sell their primary residence but they are retired with no W-2. They have 400 K equity and a balance of 400 K mortgage.

I wanted to reach out to this community to find out what my options were and point me in the right direction. What are the pros and cons if I did purchase my parents home or the different strategies I can take to get this opportunity. 

Here’s the deal

No money out of my pocket. My parents strictly want to just grab the equity out and sell me the house at 800K. I have to qualify for a second home mortgage and my parents will provide a down payment from the sell of the home and put down 200 K to giving me a mortgage of 600 K.
My parents will be the renters of the property moving forward if I purchased the home from them.

Will this work out I would like some thoughts and some input to push myself in the right direction.

thank you in advance BP community