Problem Solvers Only - REI Family Dilemma

[Timothy Cervantes]

Hoping this is the correct place to post this, forgive me if it isn't.  I'm looking for input or advice on the following situation.

My Father is getting older and it is becoming much more difficult for him to manage the 4 SFR's he currently rents. I have helped him over the years with the hammer and nail stuff and occasionally with collecting rent and dealing with problem tenants. Not until now have I ever had a close look at the financial end of his real estate investments. This past year he has not seen one DIME in rents for two units. He has been over extended and is currently facing the potential of losing his primary residence if he is not approved for any of the government programs associated to helping homeowners who are underwater. To top off the fact that he's underwater on his primary residence he is paying a 7% rate. DITTO FOR THE UNITS HE HAS NOT RECEIVED ANY RENTS ON. I am now his full on property manager (yay me!). I don't mind, he's my Pops and he depends on his units for living expenses (he owns two other SFR's free and clear). Pops is an immigrant and has worked hard to get where he is, not to mention finding time to raise a kick *** son. I am also using these experiences to bolster my REI street cred.

I have secured a tenant for unit#1 after having to evict the prior tenant I have just evicted (received judgement yesterday) problem tenant #2 and should have it rented rather quickly based on the interest gained on unit #1, they're right next door. I will also be in need of a third tenant for one of the free and clear properties. Pops doesn't follow any of the BP rules for landlords. NONE, doesn't know what NOI is and operates strictly from a GROSS RENTS perspective. So he's eating every bit of cash flow he has available when receiving 100% of rents.

What I'm trying to do is teach him some of things I have learned here and elsewhere to help him become a more financially savvy landlord.  My preference would be that he let me manage them in they're entirety and he can sit at home and collect checks.  Well, not really he still works six days a week at 70 yrs old.  "What am I going to do, sit at home and watch novelas (soap operas)?"  

Along with teaching him to be more financially savvy, I'm trying to figure out a way for me to get him out from UNDER Units 1 and 2 and into a more manageable rate.  The combined mortgages total owed is $140k which is about 40K above the current values.  His combined rents for these two are $1445, the mortgage is $1200.    He can not refi due to his credit being banged up pretty good. I'd like to purchase these from him and I think he could possibly gain MORE cash flow if we were partners in these properties vs. continuing to have the debt costs eat at all of his potential cash flow.  I'm working the numbers right now and I wouldn't have a problem with overpaying for the properties right now and would almost look at it as a gift or payback to Pops.  I'm trying to work the numbers right now to build a business case to present to him.

I'd like to purchase the property and put it in an LLC with 75/25 ownership in my favor, it would be my very first investment property. Not the sexy $50k wholesale commission or 200K net profit flip but hey, its about solving problems and potential long term win for me right?

I humbly request any input and further ideas from BP on what other actions I could take.  To add one more detail, if it came down to it he would give up his primary residence before giving up his investment properties.  Looking for problem solvers!