Matthew B.Florida courts have ruled making single member LLC's a disregarded entity in many legal proceedings.

If you did indeed decide that an LLC (not disregarded) with it's own TIN and filing it's own tax return) was appropriate then that LLC is not a foregin entity and becomes the tax payer for the property and could do a 1031 on it's own standing.  

Disregarding any extra costs, insurances, carrying costs while in foreclosure, junior liens on the DIL, etc,.......I don't care  what "% of  value", "% yield, % cost to value" you have,   $5k is just not enough margin for error.

Disregard any "do not trespass, blah, blah, blah".

You should disregard the advise here. 

Based on our research, it seems like more of an auction format, so we are concerned that if our initial offer is too low, it will be completely disregarded and we will not have a chance to increase it if there are higher offers present at the end of the offer period.Can anyone give us a general timeline of the HUD home process?

I then do the investment allocation disregarding things like personal residence and accidental rental, just AUM/investable assets held away(like current employer ERISA plans).

If that is not correct just disregard what I'm about to say.

I am no attorney, but I would think you could form a single-member (disregarded ) LLC.

If the property really wasn't yours and you were more of a nominee/agent with your name on all the legal documentation on behalf of your parents, in all likelihood if the IRS audited you and had all the facts, they would probably disregard the legal ownership and treat your parents as the true owners for US tax purposes.Even if it was a gift, gifts are not subject to income tax but would be includable in your estate and since your non-US person parents were gifting US real estate, they would be subject to US gift tax on the excess of the gift above the annual exclusion (15k I believe).