The higher the better.If you you are just going to accumulate it in a low interest bearing account I would go solar, car, house.

That has no bearing whatsoever on whether you can negotiate repairs after an inspection period.

I am not saying that there won't be a downturn but it will be more of a correction than a bear market. 

You may or may not need to keep that money in a interest bearing account for the duration of the renters occupancy. 

Child would like to buy the house, potentially for below market value, retain the original real estate tax basis and then parents would like to use the proceeds from sale to complete a 1031 in order to defer capital gains.I can see a few potential issues:Does the fact that parents converted it to a rental from primary residence cause a problemIs a purchase below FMV possible or are there 1031 ramificationsIf below FMV a bad idea, could some sort of non-interest bearing note be structured between the parties to make up gap between proceeds and FMVCan 1031 exchange property they identify be contributed into an LLC after closing for asset protectionAny advice on the structure outlined above, or other ways to transfer real estate from parent to child (while parents still living) would be greatly appreciated.

However, if yo're in a neighborhood of duplexes that may have bearing or if it's an area like Columbia Heights in Washington, DC where conversions into two units are prevalent, then it's possible.

Bear with me, I am a newb and just getting into this but … The current tenants are on a lease?

Can anybody tell me if commingling is allowed or if they must be separate.The owner of the property that I'm buying does not have the security deposits in an interest-bearing escrow account.

also bear with me here.

I don't know how many times I've said this here, but it always bears repeating: real estate is a brutal business.