I have a home I’m currently fixing up for rental.

They are interested in turning the primary residence into a rental property for a couple of years and then performing a 1031 exchange.

This was our family home that we turned into a rental.

It would be rental property to my parents and I would pay a 60% market rental rate and I would also pay the loan.

Over the last 2 years that I've managed a short-term rental in northern San Antonio, I have experienced many small contractors that get so easily triggered, offended, and upset at me and my wife. 

This might mean sharing profits, but it can also enable you to scale faster.- Consider Short-Term Rentals: Since you're in upstate NY, short-term vacation rentals could be lucrative, especially if you can manage them efficiently.

However, I don't have any skin in the game for mountain vacation rentals.

They then found out the basement was rental that all they had to do was paint it red and they had another rental. 

After 2 Duplexes ($80,000), we left with $320,000 so we want to buy another 2 Duplexes (same price) with 25% down payment ($112,500/each) since we are not living there for long-term rental which left us with $95,000 left.

SO sorry to hear about all this trouble I have been buying rentals for 40 years and probably would have run into all the same troubles you did.