But, it is written in the lease that all tenants must acquire renters insurance prior to move in.

Doing both could be difficult as @Odie Ayaga was saying, especially without prior experience and systems in place.

These are my most vulnerable tenants.If I do not raise rent on my 2 rent controls I lose it forever as any future increases are built on a percentage of the prior years rent.

Even more importantly construction will unlock depreciation expense to offset the cash flow from rent.You do have to have your QI for the 1031 in place prior to the closing of the sale. 

You will have to provide the lender a signed lease prior to closing to show you will be earning this money.So ultimately it seems like a better situation for your parents to just put the property on the market, take the money and run.  

I used the prior owners insurance to get a new roof with no money out of pocket.

Typically, somewhere prior to year 10, the total accumulated cash flow as a function of the purchase price has surpassed most of the higher initial cash flow areas.In addition, the property value appreciates (because over the long term San Diego always has but mostly because every metric shows that it should).If you desire you could choose to do it again (the final R).I am definitely not indicating that BRRRR is easy or requires no effort (it is not real easy and it requires a fair amount of effort). 

You have your markets picked out and I'm hoping you were looking at property prices prior to coronavirus.

They had been doing an excellent meet up group prior to the covid-19. 

@James EilertsThe lender (bank) in first position will ask where the balance of the $ is coming from and want to see it in your bank account 30 days prior to closing.If you are leveraging the balance they will not approve you especially in today’s world with lending tightening up.