Welcome to the community and be ready for a huge amount of information at your finger tips.

@Jay Fayz Do you have a source of regular income? 

From what you posted this is going to take a decent amount of all to make an already unprofitable property just a little less unprofitable.

Selling a primary residence and then buying it back as part of a 1031 exchange could raise red flags with the IRS.Your parents have a valuable opportunity to defer a significant amount of taxes by utilizing the $500,000 exclusion on their primary residence.

I've built my entire rental portfolio off of going direct to seller and starting the cycle of 1. sourcing my own deals 2. assigning 3. using assignment fees to build capital to buy more real estate and more marketing. 

Is this a "find a different lender" type of issue, or are there laws about this? 

Duplex or triplex with ADU does qualify for one of the f/f conventional products.  

@Krystal Lozano A good majority of areas still produce day 1 cash flow for multi family in Pittsburgh with a 20-25% down payment.

@Lauren Lewis, also one of our members Barb Mayne hosts a monthly meeting for the Topeka / Lawrence areas - it is on the MAREI Calendar and she also has a facebook group and a group on meetup - eKARI  Eastern Kansas Association of Real Estate Investors.

Yes, a HELOC or bank a line of credit is different than a lump-sum amortizing mortgage (DSCR or otherwise).