If not, ride out the 12 months with the hard money lender.People have to make good choices and not over extend themselves just for the sake of buying something they really can't afford or that doesn't make good cash flow.

He has a knack for making bad choices. 

A 1031 exchange is a smart choice for your parents, reducing immediate taxes to $70K (capital gains on $300K boot + $25K depreciation recapture) versus $148K without it.

You would actually be borrowing less money than originally but at a higher rate.   

Reason I ask this is I believe a famous name doesn't necessarily mean the business is well-run, it also does not mean it is not well run.I have seen it from both sides where there are well run companies and We have a borrower who is pretty well known, was just seen on a red carpet, is a great sales and marketer, but is being sued by everyone and anyone because of defaults. 

Otherwise you’re saying you expect other people to subsidize bad choices over and over again.

So, we felt we had no choice but to stick with this guy.Move on to the end of June. 

Hey @Brad Roche - We do a significant amount of renovation loans (both Fannie May & FHA) here in Chicago and prefer the Homestyle loan only because it's less stringent on the borrow about what they have to repair, and they provide the general contractor a material draw at closing which helps the project start on the right foot.I thought the minimum down payment was 5%.

Most banks/credit unions have clauses that prohibit borrowed down payment funds or seconds on the property. 

There may have been better choices for a rental at the time.