You need to be capable of changing gears from time to time.

Loan, that way you dont have to fight over profit/accounting, which could be a pain if you will be GC'ing the project.

Ultimately, only you know what you are truly capable of.

Apparently these agents either don't believe you are capable/serious, or either not realistic in what you want to offer.

I don't necessarily agree with the rule, but I wouldn't want to be the one fighting it in court one day.

From a practical standpoint, were I faced with a situation where I transferred title, they called the note and I transferred it back and they still wanted to push forward with it; I would probably weigh my costs to fight it verses to pay it off with cash on hand or refinance it.

Fight or flight often comes into each deal you do, but just remember to push on, ask questions and run your numbers, then run them by someone with experience.  

Since its stretching our capabilities and local area of knowledgeCan anyone comment on there experience, dealing in East Chicago with the Municipality and Local Licensed Contractors?

Is the borrower fighting you?

The scenario you are considering probably wouldn't work, because at the age your parents are, in reality, they probably won't be capable of living independently for that many more years, then, their equity will be spent, and they may not have the means for paying for assisted living, etc.Maybe you could move in with your parents, and help improve the house while you're living there.