We're exploring creative ways to provide him with the cash needed for the down payment while avoiding triggering a taxable event.One strategy we're considering is purchasing his future primary residence ourselves, making the mortgage payments, and then, once we've built enough equity—comparable to the appraised value of his rental properties—transferring the title to him as a form of exchange.What are your thoughts on this approach?

Its pretty much a necessity as the loans are so large on average compared to other areas of the country..

How is my property performing compared to the local market? 

Compared to fixing them both up and paying full taxes as flips.

Property Valuation:Investors look at a variety of factors to determine a property’s value, including comparable sales (comps), rental income potential, and location.

Here is some key information:Property recently hit the market and has 2 cash offers alreadyThe seller provided a pre-inspection report, which I shared with 2 different lenders, both think it may fail conventional financing due to potential structural and electrical issues (realtor thinks it could pass conventional)Seller has 100% equity but is behind on other payments (not sure of the urgency money is needed)This is my first attempt at an “investment” property so I’m new to thisI see 3 optionsMove forward with an offer using conventional loan pre-qualification-Not as attractive of an offer to the seller-Possibility that appraiser calls out structural/electrical issues that need to be fixed before closing, effectively causing financing to fail- Best terms and fewest loan fees for meUse a rehab style loan such as ChoiceRenovation-Even less attractive than a conventional offer to seller, but less risk of failed financing if appraiser calls out issues-Slightly worse fees and interest rates compared to conventional-Lenders tell me possibly up to 60-90 days closing in some cases, with red-tape for contractor requirements and draw schedules (sounds like the most hoops to jump through during rehab)Use a hard money lender-Most attractive loan option I can give to seller so I can compete-Much higher fees and interest rate for me-need to refinance into a conventional at the end of rehab (not familiar with seasoning periods but I think this is a factor as well)Which option would you do?

The "fair market value" parks they compare us to is not even close.Regarding our park, in NYS, the owner is responsible for moving the home off the lot in cases where we are evicted (to somewhere it can be put - the company then could charge storage fees if the owner wanted the home moved to another site) i, that is state law as we own our home and rent the lot.

IMO 6 months is nothing compared to other illiquid assets.

  $6.25k feels manageable, so I compared the rent vs purchase numbers.  

I would compare my return with any market, anywhere but 1) this is a different San Diego market than the one I have been so successful in 2) while I am a big fan of leverage, I am not a fan of over leverage.