However, it’s important to understand the loan’s key requirements:Owner-Occupancy: The borrower must live in one of the units as their primary residence for at least 12 months.Single Borrower: FHA loans are issued to individuals, not partnerships or entities, which means the loan would need to be in your name alone.Given your scenario, only you can qualify for the 203(k) loan since your partner does not intend to occupy the property.2.

I've found that there are a lot of out of state investors who like Tucson and this provides a quick explanation for the area.

The interest rate is also priced like it's a primary home purchase. 

Seems to be what most most turn to who want to buy real estate beyond their primary residence. 

The value of the home is not increasing substantially at all - the primary reason for the increase is higher risk is due to storms every year the past several years.

My wife and I are officially under contract with a new primary residence, with the goal of moving and then turning our current home into a rental.

That means either you won't cash flow or your Return on Equity (ROE) will be terrible.Since this is your primary residence you'll be exempted from paying capital gains taxes when you sell.If you sell to your parents, it will be considered a non-arms length transaction and will get closer scrutiny.

Thanks, Collin for the detailed explanation.

@Phillip Austin I self-manage my properties including some where I do rent by room as a primary strategy, and it is very effective if done well with good screening in place.The difference is starting with shorter leases for me. 

I’m finally wanting to pull the trigger on getting another property, but this time the primary goal of turning the sfr into an Airbnb.