Both properties have a substantial amount of equity that’s essentially sitting idle.Would it be a good idea to tap into this equity (through a HELOC, cash-out refinance, etc.) to fund future fix-and-flip projects or purchase additional rental properties?

Here's some input to help guide the decision between selling or renting the property, considering the specifics of the property and the potential additions like the ADU (Accessory Dwelling Unit):1.

Have you underwritten the deal from the perspective of: 'If i fully rehab the property, in addition to repairing it structurally of course, how much can I sell it for?' 

Additionally, wages sent directly to a church are not considered charitable contributions—to qualify for a deduction, the employee must receive the income first, pay taxes on it, and then donate to a qualified 501(c)(3) organization while itemizing deductions.The IRS closely scrutinizes arrangements that appear to shift tax liability, and if deemed an attempt to avoid taxation, both the employer and worker could face serious legal consequences.

What are you trying to accomplish, what’s the upside to fight all the additional downsides I’ve pointed out?

Considering that my parents and I are not Canadian citizens it adds an additional wrinkle to things as they or I are not able to claim this as the primary residence and avoid the capitol gains tax... a lot to consider and think about.

You can prevent this by requiring them to add you as "additional interest" on their policy.

Are you cashing out the equity and using additional revenue streams to get the 2nd one?

Quote from @Jaycee Greene: A few things I noticed, in addition to having the tenant pay the utilities are:1) Incorporate annual increases in rent higher than 2% (in your area, maybe 4%-5%) with a slightly smaller increase in operating expenses (say 2%-3%)2) With a gut rehab, I'm not sure why you need to spend $128/month on cap ex, at least for the first year or 2.3a) An 80% cash out refi is probably going to be hard to get.

Ok it might not be 1:1 but it will add additional revenue.