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!

Kiavi minimum 2k origination fee for 30Y loans is ridiculous.

Great area to buy in, house was all original 1978 brick ranch.

The original intention was to do a light cosmetic rehab and rent it out.

Originally posted by @Trevor Fleck:@Eddie Lozada check out Rent to Retirement.

Its just hard and if there is any softening of the market.For the original investor:1.

In addtion when the net investment property is ready or on the ARV you can do the same thing pull cash out and pay off the original amount and use the rest for another down payment.

It is also important to consider the transactional fees associated with originating the HELOC, whether an appraisal is required etc.

Their rate is lower than the original bank.

OF course, you may have all this stuff figured out, but the original post was vague.