I recommend compiling an analysis/presentation stating that your parents will save an "x" amount by working with you instead of "ABC" local property managers.

For Conventional, you can only use 75% of the gross rent until you have Sched E history for the rental for a net rental income analysis. 

Or, has your analysis-paralysis already taken over?

After conducting thorough due diligence, including a professional inspection and market analysis, the property was acquired for $72,000.Renovation and TransformationThe renovation aimed to modernize the property, enhance its appeal to potential tenants, and maximize its long-term value.

From my analysis—even with very conservative numbers—it looks like a cash cow.

If I am all in on the property for 360k (purchase and some finishing construction as well as carry costs) and the home is valued at 450k or more (based on what im told by agents as well as my own analysis while staying conservative), that is 20%+ equity I believe, unless I am missing something.

Do you use the BP calculator for you analysis?  

A big part of the puzzle is making sure you run a solid cash flow analysis.

Take all your analysis that you did for the deal to court so you can explain why they got the value wrong. 

Cool wish you the best and post about your project as you go through the different stages I am sure the audience here would really appreciate it from your POV