I believe if you sell to them at significantly less than market value, there is a way to consider it a "gift" of equity. so instead of giving them cash, you would give them $60k in equity and they would then have to get a mortgage for $40k...assuming a $100k purchase price.This may be something to look into.

Adding you to the deed becomes a gift in equity and can cause your parents to pay gift tax (there are annual and lifetime limits).

Here, maybe this will be interesting/helpful to you - I am currently working on doing this right now with my own property, which happens to have a nearly identical loan amount as yours, and there is $50,000 in equity I could refi out.

They actually have about $65k in equity.

This deal cashflows, will have built in equity, and is in a great area.  

My credit is great and I have over $100k in equity.

That is 245,000 in equity. 

Here are a few thoughts to consider:If your ARV is correct and your repair estimate is accurate, it's worth asking why the owners are prepared to forsake $40K in equity just to avoid a $6K expense.

I don't have a ton of cash, but I do have about $150k in equity in the first house so that may be a potential source of funds to finance some deals.

. $100k in equity.