Several people mentioned that a quitclaim for the LLC was necessary, but there were others   Also, as most of the conversation surrounding the BRRR strategy seems to be around rentals I was unclear if it could be used for flips such as in this situation. 

But remember that only capital gains can be excluded under the 121, not deferred depreciation recapture, so you'd need to speak to a CPA about your specific situation to make sure you know what's what. 

I am just curious what other people have done in a similar situation.

My main concern would be an eviction situation.

But that same situation does not apply when contributing a property into an entity after a 1031 exchange is complete.

I can recommend either, depending on your situation.

I think what's going on is you are mixing your numbers from when you will live there vs when you move out and those are two different situations. 

My current situation is I come home from college to my parents getting divorced.

I don't think you can charge a deposit that high, and keep it if their situation changes.

You have to understand the 1% rule is a general rule of thumb and not applicable in every situation.