Having given this idea some thought, you have not provided enjoying information for me to make a sound decision.For what it’s worth, you may have equity today, but it may be non-existent tomorrow.  

What it sounds like is the initial inspection was not done correctly and it was partially repaired. 

Sounds like you have a plan!

Sounds like a very poorly run property which could be a good opportunity for someone but I would only value it based on lot rent and/or land value. 

If its a hot market you might have to make an offer before getting in to see it, which may sound scary, but if you have a good team its not a big deal.

However, the trust you mention doesn’t sound like such.

This sounds like what I'll be doing.

This company sounds a bit like a scam operation. 

Is this logic sound?

It looks like the main thing is that your parents would have to hold the property for a minimum of two years in order to convince the IRS you weren't engaging in cost swapping.