Thanks all for your help and guidance Hey Mike, first of all, i want to say I'm truly sorry for your family's loss.

There's only so long one can hang onto unrealized losses when the cracks start to emerge.

I'm starting to see properties that were bought off the MLS two years ago, go back on the market at a loss of 6% to 10% of ARV.

The only thing I will add is, if you bought that property recently and plan on selling soon, you might well be selling at breakeven or a loss. 

I filed a claim with WFG title insurer and they just denied me saying: "Title insurance is not a casualty insurance that covers every possible loss, nor is it a guarantee of any facts regarding title to real property.

This creates two loan payments ($100,000 of equity and $300,000 on the new mortgage).Key NumbersHome Equity Loan Interest Rate: 6%Mortgage Interest Rate: 7%Rental Income: $3,000 per monthExpenses (management, taxes, insurance, maintenance): $800 per monthIncome and ExpensesMonthly Rental Income: $3,000Monthly Expenses: $800Monthly Mortgage Payment: $2,000ExplanationThe investor earns $3,000 in rent each month.They pay $2,000 on the investment property mortgage and $800 on other expenses.This leaves $200 profit each month or $2,400 per year.However, you have to pay $6,000 interest on the equity borrowed.This leaves you with an annual loss of $3,600.This example shows that while the rental property generates positive monthly income, the interest cost of borrowing the initial $100,000 results in an overall annual loss.

Who’s paying the transfer taxes, title insurance, property taxes, etc etc. what if you don’t net enough to pay realtors commissions and your realtor commissions does your dad take the loss?

A promissory note and deed of trust are important but there are also other disclosures and documents you should collect to help protect the loan - Lender's Title Policy in 2nd position behind the bank loan, Loss Payee on the hazard insurance policy binder behind the mortgage lender so your parents get reassurance they'd be paid back if there were any claims that need to be made.

Just a quick clarification for all that put the weight in their feed back as the "EDUCATION". 

., other borrowers in your market, contacts for tried and proven contractors, etc).Of all things to do, you should not hide and ignore phone calls.And last but not least, if none of that works, list the property in hopes to recoup your losses and let another investor take over and get out of the project and take the lessons you learned and apply them to the next one.