Reverse 1031 Exchanges are more complicated and have higher costs, but can solve these problems. 

There are also additional costs of operating and maintaining an LLC, like separate bank accounts, annual report filings, tax filings, etc.2.

Begin by targeting distressed properties in gentrifying neighborhoods, securing financing through hard money lenders or private investors, and focusing on cost-effective renovations.

If you are going to do a HELOC then you must understand the cost of using those funds.  

FYI, most of my CFO clients borrow from HMLs that will lend up to 100% of their rehab costs. 

Do you have a total price range you're looking for, or maybe a cost/door?

The main issue is your exit is capped so if your costs go up, your profit goes down.

I invest primarily in a lower cost area but also own property in, and am looking in, a higher cost area.

They get a higher return since they are covering housing cost, have the $250k per spouse primary residence deduction in gains, is a savings account, higher leverage position, lower interest rate possible, will pay more premium for location, etc.House might be overpriced for REITs but not for home owners.  

However, this has to be the primary residence of everyone on title in order to qualify and even if that were all true, we're still only up to $1M that way.I agree with the other commenters, the parents should continue to own it and live in it as their primary, leave it to the daughter when they pass, and she inherits it at the stepped up cost basis.