I'm assuming if this was an option everyone would already be doing it but I am just curious from a professional to understand why this isn't an option.I received a question from a friend that was somewhat similar to mine above which got me thinking. 

As I learn both options.

If you are looking to pull more cash out I'd go with the second option.

If this property is hard to rent, or is functionally obsolescent (only 1 bathroom, no yard, etc), or has deferred maintenance that will be costly, or is in a location that is not appealing to Tenants, then maybe a sale would be a good option in favor of a property that has better Tenant appeal, which will likely increase rent and avoid long vacancies in between Tenants.An option to consider....

However, for most investors, this isn’t always a practical option.

(You say it’s worth about $100k more than you’re paying so figure an extra $15k.)Maybe you’d be better off partnering with the parents unless they have zero interest?

Property is 3021 E Shangri La Rd, Phoenix, AZ 85028.I hear you—this sounds like a tough situation, but you still have options to minimize your losses.

Focus on areas with strong rental demand, strategic rehab projects, and financing options that allow you to scale your investments.

I've stabilized that hemorrhage and have made good progress to reducing this debt but a recent chat with a conventional lender didn't seem to yield any options due to the DTI issue. 

I am on the lending side of things and always happy to discuss shop and various funding options out there, even if not within my resource pool.Cheers!