In your scenario you'd have a potential tax event on that $200K difference.Here's a creative way to access most of that money tax free however. 

I love it here because there are still positive cashflowing deals and lots of appreciation potential due to the strong job market, growing population, and major companies setting up shop here like Intel, Meta, Amazon, etc.

Seacoast NH, for example, has some great potential with short-term rental markets (Airbnb, VRBO), especially in towns like Portsmouth or Hampton, but the regulations can be a bit tricky.

They don't want the company to be potentially liable if an owner doesn't follow through with the inspections and repairs.After the GFC, we needed the capital investment or they would have had to tear down more houses than the thousands that they already have.

Basically, the further you get away from the city the more potential for cashflow, but you're also dealing with a different tenant base that may be tougher to manage.

This added so much to the overall cost and took up more of my time than I expected.Overall, it was a huge waste of time, money, and energy.

To minimize capital gains tax on the sale of their primary residence, your in-laws can utilize the $500,000 capital gains exclusion, potentially explore an installment sale to spread tax liability over several years, or consider converting the property into a rental to use a 1031 exchange for tax deferral eventually.

It's easier to scale with multifamily properties due to income potential and operations.

The deals are really so sparse that you can sit and wait and wait and wait for the right deal in a specific neighborhood or you can look at all potential deals across the Metroplex and beyond.  

All of this at $0 cost, just some time, energy and effort.