The cost of purchasing the house, rehabbing the house, and extra reservea and carrying costs during that time.Take a nicer part of Baltimore, I'd probably want $350-400k liquid.

He has even come to my personal house to pick up money and some things I ordered from Amazon to be installed in the property, and fronted some of his own money to keep things moving while I wait for the draw from my lender to clear.

If you'll be living in the house and renting it from your parents that is fine for a 1031 replacement (make sure it's an arms length transaction of course). 

We are a few friends with special needs kids, who want to book and buy houses adjacent to each other.

Say I pay cash for a house or put down 30k?

He wants me to call him tomorrow to set up an appointment to see the house.

The plan is to renovate it and create affordable housing, possibly section 8 only.

Any time you can add more housing to the same lot, it's a good idea, but you first want to check with the city to see if you can and what you will need to assess those costs.

There are some exceptions, but they are rare, they have access to funds, and they typically built their empire when the timing was right and got lucky.Likewise, it's not often that you can buy a house and sell it for big money six months later.

If you're new to the investment strategy of house hacking, read "The House Hacking Strategy" by Craig Curelop.