They are absolutely right. The challenge that comes with putting long term leverage on a SFH to rent is that you are approaching a retail product with an income property approach. Meaning that if you were looking at a commercial property (retail, office, large multi family) you would value the property based on the income it generates (which is influenced by a lot of factors). But to keep it simple, you would simply take the revenue minus the expenses and it determines the income, and from there you can put a price tag on the property. With a SFH, value is determined not by what you can generate in income, but what are other homes like it selling for on the retail market, typically to owner occupants. So what happens is that while you may be getting a "good value", it may not really be a "good deal" not because of your dad, or the neighborhood, or even the house but simply because you want to rent it out. If the rents are not high enough to support the taxes, loan repayments, expenses (short and long term), property management (which with you not living nearby you need to seriously consider, typically 10% of monthly rent) and other expenses WHILE giving you cash flow, then you need to look at the deal again. Maybe you negotiate a better price, maybe you do seller financing with your dad at 3-4% interest (more than he would get with the bank, and less than you would pay on a loan= win/win), maybe you turn around and do a lease with an option to purchase (not lease option, you would need 2 separate docs for this one, talk to an attorney who has done them before), maybe you turn around and do seller financing at a higher price and higher interest (cash now, plus cash flow without the responsibility of maintaining property), or maybe your dad believes in you enough and wants to help give you a boost in the beginning by allowing you to flip the house and takes the profits from it and get into a better property, or multiple properties. There are many ways to skin the cat, and there a few ways to burn it to a crisp. Avoid the latter. Many here on BP can help if you can provide more accurate numbers such as true ARV, going rent rates for that size house, what repair costs would you need to get it rent ready/resale ready (and starting out, that can be the hardest part to learn if you have no construction background so ask for help on here), and days on market in case you did look at flipping it. All those numbers matter in determine exit strategy, as well as purchase strategy. But it sounds like you will very soon take down your first property. It can be a little unnerving, but its a great decision to begin and no better way to get started than with a little help from family. If you can get those numbers mentioned above, I know I would be willing to help you run them and look at all options to see which ones would be the best choices so that you can then go discuss them with your dad. I'm sure many others on here would be willing to do the same.
