Purchase SFH from older Dad - he stays in home as renter

[Gustavo Visalli]

I am looking into purchasing my Dad's and keeping him there as a renter.

The property: SFH, 1000 sqft, market price ~$410,000, 2 bed / 2 bath on a 0.27 acre flat lot with a large backyard.

My 70+ year old father wants flexibility and to cash out some of his equity. He owns the home outright. I live in CA, he lives in Boise. He wants to be able to travel to/from CA to visit his new grandchildren and to leave Idaho during harsher parts of winter. I have ~$100K cash to invest and can afford an extra $2000/month expense. I also have a 401K with $650K that I'm willing to borrow from.

I'm interested in setting up a seller-financed purchase that would keep him in the home as a "renter". Goal is to provide him with monthly cash and for me to slowly build equity in the home for use as a rental and/or second home in the future. This is my father and I'm fine charging below market rent as long it doesn't cause problems with the IRS. He is handy and would handle most maintenance.

What I can't figure out is: 1) how to set up the seller financing w/ the rent component. 2) whether to purchase as investment property or as second home and 3) deal directly with my father thru an real estate attorney and 4) considering his age, whether to set up a balloon payment a few years down the road for his benefit. He isn't great managing his money so I'm hoping this would also give him some consistent reliable income in his later years.

This is in a good area of Boise and large lot would be perfect to add one or two ADUs down the road, and I am not opposed to moving there with my family in 10-20 years. Any advise would be greatly appreciated. Thanks!