Gifted properties and leverage of.

[David Roe]

My father paid his property off and just pays taxes and insurance.  He is willing the house to me when he dies (God forbid) and he continues to try to work these labor jobs that are killing him.  My idea is for us to pull out the equity in his property and buy him a rental property or two or muti-family that would cash flow enough to pay the equity loan and still leave some cash in his pocket.  But he works under the table and has little income and would no longer qualify for a loan.  Whats the best way to do this?  Should we transfer the property into my name, and I take out the equity to invest into other properties for him?  His place is worth $120k i could pull out 80% and use the money to get other properties.  What's the best method of doing this to keep from capital gains from a gifted house and such?  

Dave-