You're leaving over $4 grand on the table annually by not adjusting to the market, 

My decision to leave allowed the father-son relationship survive, as if I had stayed any longer, things would have completely blown up. 

@Brad De VriesSome considerations:1) If you are planning to use a conventional lender, your parents would have to "gift" the down payment to you as you cannot borrow the down payment (it's your "skin-in-the-game").2) Capital Gains tax is a federal mechanism.  

Additionally, since it looks to be turn key you arent leaving any room for forced appreciation. 

Government leases will have appropriation clauses, meaning if government doesn't fund lease, they can leave. 

Probably once I leave the W2 world

They are not leaving much room or incentive for the investor. 

No tenant, no matter how good could leave the place without some disrepair in 6 years.Tl;dr 40k house on market 200 days, wondering why an investor hasn't picked it up if the simple act of getting it is already positive cash flow. 

You have control and use of the property but not ownership so it still leaves the door open so you can do the 1031 on the sale of the old properties into the new one held by the EAT.  

it keeps the highest and best from leaving way too much money on the table.