Finally, SB 1994 gives a homeowner several remedies if a wrap lender violates the law, including the remedies in the Texas Deceptive Trade Practices Act.SB 1995 (Watson) strengthens the disclosure requirements that apply to wrap loans.

@John Teachout you actually did hold it for productive use in trade business or for investment.  

Going from SFR to MFU can be done effectively using the 1031; you're trading up in value and deferring the capital gains.This was my path where I closed with 95k on the sale of the SFR and used that to get an LTV of 70%(not the bank requirement) on a 6-unit. 

Hard to say without knowing your budget, skills, and goals.If you are wanting us to randomly throw out effective strategies, here is one ... if LA proper is too expensive and too competitive for you, then go East young man ...

You would add the routine purchase costs to your purchases on the replacement property in order to determine if you have traded equal or up in value.  

I am also interested in learning about the 203k loan, as someone who is not skilled at repair work, it seems like a great idea to me.

If they were looking to create some investment income and can afford to buy another home without using the proceeds from the sale of this one, however, a 1031 would be a great tool for down the road if they were looking to trade-up to a more lucrative property or move their portfolio into another market without paying taxes on the sale.It sounds like the tax exempt gain will be the best bet - it's called the Section 121 exclusion if you want to google it. $250k for a single person, $500k for a married couple filing jointly.Best of luck to you and your parents!

A Contractor might do some work but he is basically manages all the trades to do the work correctly, on time and budget.

I am a electrician by trade and have experience in contracting and can answer or find the answer for any of your questions there.

I market to my list of investors i do business with, this was a shot in the dark because im in Ohio and got the offer on a car trade.