The property has to meet very minimal requirements to be allowed to be rezoned (section C). 

As Nathan suggested, I'll learn a lot more as I go, but what currently resonates with me is minimizing tenants rather than maximizing RoI.Tim and @Adam Tafel, I will be reaching out to you.Thanks again!

The plumber’s report indicates that the leak may have been caused by an overflowing tub or sink upstairs, but the tenant in that bedroom denies any such incident.As a result, I now have substantial expenses for the plumber and restoration company, including drywall repairs, painting, texturing, and reinstalling electricals.

Indicative price around $1.1M, which would be a loss, with tax around 2% potentially 20k/year.

You can use the 1031 to sell a larger unit that provides better cash flow while minimizing active management.You can either try to cluster those sales together so they close in a way that lets your replacement property be listed on each 45 day period and you close on it within 180 days of the first sale (the first exchange that will expire).Or you could do something like a reverse exchange where your Qi purchases the new property and holds it for you for up to 180 days while you sell all of your properties. 

Is their current portfolio distressed, or was the majority of their current portfolio purchased at the peak of the market, indicating that they might be in distress in the near future. 

If the guidelines are clear before they sign the dotted line, there is a mutual respect, and a good vetting process is performed I think I can minimize tragedy.

The concept discussed likely assumes that you’re building equity through appreciation or loan pay-down, while any cash flow is minimal or neutral.

you will need to look at the APN of the property and line it up with what you actaully bought. as mentioned the tax assessed value is not an indicator of value. the land could be a utility easement, used for stormwater management etc.

Overall, my primary goal is to create the opportunity to get into another home at minimal cost while keeping my parents in the current home, so I'm leaning toward transferring/selling the current property to them.