The calculation involves:Selling Price: $1,075,000Original Purchase Price: $355,000Depreciation Recapture: $105,300 (taxed at 25%)Capital Gains: Sale price minus original cost, minus depreciation, minus selling costs (~15-20% federal capital gains rate for their income bracket).State Taxes: Since the property is in California, state capital gains taxes will also apply.Given the multiple layers, I’d highly recommend your parents work with both a CPA experienced in real estate and a qualified intermediary for the 1031 if they choose that route.If you need recommendations for professionals in Illinois or California, feel free to ask!

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If you're ever interested in seeing what's going happening on the western side of the state feel free to reach out anytime. 

Without accounting for management fees (I have not yet decided if I will try to self manage), and with planning to raise rents to typical market of $825 for each of the smaller units, and $1200 for the larger unit, does this seem like a worthy first investment? 

My second house was under contract before it was even listed, but the combination of my GC disappearing and having to restart the permitting process for the carport in March right at the start of Corona lock downs dragged that out and eventually feel out of contract.

Quote from @Jaxin Pierce: I'm a self-starter entrepreneur who owns a vending machine business.

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You may not be able to break the contract this year but would recommend getting additional estimates going forward if you feel it is expensive.

(I personally prefer $2M/year and I think that cash flow is plenty enough to cover any mortgage risk along the way, but there's no doubt some people would feel more comfortable sticking to the $24,000/year and that's totally cool too!)

Feel free to reach out if you have any advice for a newcomer or if you're also investing in the Kirkland area!