I guess given the other two choices, I'm just trying to understand why you are you potentially considering taking all your equity, giving up home ownership, and investing in equities?

We have about 200K in equity so that will probably make a difference on our decision.  

It's commendable that you're trying to help these folks, but there's a lot of information you either don't have or didn't share with the community in your post...Are you saying there is $200k in equity in the property? 

Yes that would definitely add about $100K in equity and also the property will rent for $2500 a month. 

Make sure you do a cost benefit analysis to make sure your dollars in equate to actual profit.  

If the value of the property is conservatively $380,000 and we have $55,000+$220,000 = $275,000 - giving us about $105,000 in equity to keep the 80/20 we can pull appx $30,000 for buying another property.

It sounds like you estimate the value of the condo to be $70k, you're hoping to purchase it for $50k, and after the seasoning period you want to do a cash out refi and pull out the $20k in equity. 

[i]Although dual agency is well-accepted in equity basedtransactions, the law is developing a "protected status" for distressedhomeowners.

They held on 2 homes as rental properties and after 25 years ended up with almost a million in equity and 5k in monthly cash flow.3.

If you have enough Cash Flow to live the way you want, why do you want to make more in taxable income rather than increase in Equity which is not taxed until you sell...