I did think it was "free", but not approving the work and not knowing for 6 months - I am not paying the mark up bill that was proposed. 

What you are proposing is reasonable.

@Dakota Cochran   you can  only  go up to a  80% ltv on  a cash out  refinance ...what is the  approx value and present loan balance   2) the  cash out refinance  pricing  will be  higher than the  straight  refinance  3)  if you have   need  for the  cash out - take it  if you can get it    4) the  rate  improvement  you will likely  find  will  be   realtively small   ...prob  get  1 to 1.5%  lower in rate ...be  aware of the loan fees/ closing  costs  and prepaids for any proposal you are  considering  5) ask  a lender for  quotes  for the  different  options you are  considering and  analysze  the costs and payment  differentials 

As long as you are making a good faith attempt at a fair allocation, and not shortchanging IRS, what you propose is sound. 

Interesting that people on here who propose to help each other got into a spiral.

In Illinois the proposed law had no automatic rent increases allowed with no caps.

Our fee will be based on that proposed schedule, not the actual close date.

What % of the project are you proposing that you put down?

To be clear what Kushaal was proposing would is a conversion for your dads primary to a rental and then a sale while it would qualify for both 1031 and 121. 

Situation:- A close friend of mine (roommate from B-school) is planning on selling his single family home that he lives in because he just went under contract on a larger, more expensive house- The home he wants to sell is worth $700K to $800K and he probably has around 50% equity in it right now- I think his property would make an awesome STR (I already crunched the numbers) so I want to figure out a way to put a proposal (or a couple of options) in front of him to buy all or a portion of the home from himWhat I want / value in the deal:1.