So the $700 payment on a home that rents for $1200 is still a decent cash flow.

Down payment?

This is what the contract says about the Non-Refundable Down Payment;  The Non-Refundable Down Payment in the amount of 10% shall apply towards Buyers purchase price or closing cost.  

That way, sons pay for the down payment, make the payments, parents are the residents, and sons acquire ownership in the future.

Taxable Value 75,830Purchase 50,867Tax 1986.70Vacancy 10%Repairs 5%Capital Expenditures 5%Property Management Fee 10 %Investment results: Purchase Price: $50,867.00 Purchase Closing Costs: $3,000.00 Estimated Repairs: $0.00 Total Project Cost: $53,867.00 After Repair Value: $70,000.00 Down Payment: $10,173.40 Loan Amount: $40,694.00 Loan Points: $0.00 Loan Fees: Amortized Over: 30 years Loan Interest Rate: 5.000% Monthly P&I: $218.45 Total Cash Needed By Borrower: $13,173.00 Monthly Expenses: $643.95 Total Cash Needed: $13,173.00 Cash on Cash ROI: 5.11% Purchase Cap Rate: 6.48% Really, I know it’s not a great deal, but it’s a property that I can buy into for cheap.

We are going to use this cash flow to pay down the HELOC we use for down payments so that we can buy more houses sooner.

Repayment would be the interest-onlyOption 2) If you were wanting to use the proceeds towards a down-payment of a rental house.

That way, sons pay for the down payment, make the payments, parents are the residents, and sons acquire ownership in the future.

You have a problem right now and the time to address it is right now.In an ideal world your tenant with the late payment record would progress to nonpayment and you could immediately evict for that.

How much are the monthly payments?