You don't want the courts to invalidate your note/mortgage if you end up in court.Second, when you accrue interest you are effectively increasing the payoff at the end, and therefore your LTV based on total exposure.

When you are doing flips in the volume that they are doing them, you are bound to lay a few eggs.Nicole Curtis model can work because between acquiring properties from the city for $1 and the money that she is pulling in from HGTV and the connections and pricing she can probably get from contractors for the exposure she provides them means she probably has her costs well under control.  

If you buy at market, do so knowing that you have down side exposure. 

I personally suspect that a small amount of asbestos exposure is not that big of a deal, but that is for OP to decide unencumbered with misleading advice.

I had a primary exit strategy in mind, but due to the change in income, I’m considering changing course and would like some feedback to see which exit strategy works best for me in this situation.This commercial property is a 10,115 square foot multi-tenant office building in the Los Angeles area, which is positioned in a great location with great exposure.

Even then, I would say before running out and trying this type of revenue generation, you need to write a couple hundred loans and gain exposure to all the different workings of application, loan placement, loan processing, conditional commitment, commitment, underwriting, regulations and secondary market operations.  

My question is - how can we structure the payment portion from our parents in a way that does not bring on tax liability but also does not require our parents to stick their necks out by being "on the title , LLC, etc." and increasing their exposure?

Note....I never gave them permission to post my deals....but the exposure has been good so I let them keep doing it. 

@Ryan BeasleyI am definitely a supporter of investing in ETFs, and I do like REIT ETFs as a nice diversification that gives regular market investors some exposure to real estate. 

You will find a buyer for your deal, just market it each day and use all your available resources (craigslist, facebook, etc.) to get the property as much exposure as you can.