Both markets are a bit overpriced, considering  taxes and insurance are so expensive now.

Purchase price: $28,500 Cash invested: $178,000 Sale price: $250,000 Bought a 3 unit riddled with drugs or prostitutes from the city at the tax auction, spent a year gutting and consolidating all three units in two structures to a single-family home with an exterior side entry garage.

Sure you’ll be taxed on it.

@Mickael Castillo Are they current on the taxes?

For your sake I would make sure, if you aren't NNN right now, that you at least have RE taxes protection in your lease.   

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.

Your total project cost is only ~ $143k. 3c) Your interest rate is probably going to be in the low to mid 7s, at least4) All states/areas are different, but I usually see with my CFO clients that their property taxes are higher than their insurance, with taxes often 1.5x higher than insurance.5) Lastly, I saw PM fee of 8%, are you paying someone else to manage this?

Stephanie I recommend maybe looking to post this in the group on note investing as that is where many are active about those who invest in notesReal Estate Tax Lien & Note Investing Forum | BiggerPockets

Hey Andre,There are multiple HELOC products out there which can close fast (within a week) & are not based on Tax Returns etc. and will still take income as long as your friends income is getting deposited into the Bank account. 

Assuming your debt is SUPER cheap and only costs you 12% you’ll save $22,800 TAX FREE  So the combination is saving $60k at 12% (or more) is $7,200/yr and $130k in the bank at only 4.5% is another $5,850/yr  so you’re over $13k GUARANTEED instead of a chance to make $7,200 before taxes