It’s taxes are and regulations are lax and the market is going to grow faster then Seattles did.

You also benefited from the tax deduction that includes PMI and per your own statement, it's been a great experience until you looked at a recent statement that reminded you of what you once knew but forgot from long ago.Do the math.

The Mortgage would be around $3587/ month including insurance, taxes, Mortage insurance.

U want your parents to talk to their CPA FIRST.. if they go the development route they are now ( depending on the amount of units) creating inventory.. which will be taxed at ordinary income rates ( very HIGH)if they just sell they can 1031  and move on to something else.. many times when you run the math consider the risks of a partnership.. the sale of the land is far better than thinking your going to make some profit.. 

Of course, nothing is stopping you from selling Rental #1, paying taxes, and then taking your leftover after-tax profit and moving that into Rental #2. 

I have some SF units pulling $900 or more per door with debt.

Based on the costs of infrastructure, water, sewer, electric, roads etc. a investor will be deep into debt for a long time before lot rent will even come close to covering debt servicing. 

Here are some considerations and normal practices to ponder: Employee Structure, Contractual Agreements, Insurance Coverage Benefits, and HR MattersLegal and Tax ImplicationsCommunication  and Collaboration.

This sounds like a live in flip, which can be a nice way to get some tax free capital (if you live in it for two or more years).

Concurrently, I intend to construct our dream home on an adjacent 20-acre parcel that I already own outright.I've double-checked the property taxes, and they're not just accurate but slightly on the higher side.