You see a boat jetting across the bay and then he walks into a luxury house.   

By the time it was all over, the court fees, attorney fees ate up the entire EMD and then some --- this seller never intended to sell the house. 

Sure enough, the door was left unlocked and the house is just full of trash and abandoned junk.

Have you made a research on house prices, rehab costs, time on the market to sell and etc?

Most traditional property managers don’t handle this setup due to challenges like managing tenant disputes, coordinating overlapping move-ins/outs, and the risk of Fair Housing violations when selecting tenants.

These cash outs got me 14 houses with no out of pocket $.

Borrowing against your paid off house without an income puts way too much pressure on the success of whatever deal/project you decide to pursue. 

Zoning Ordinance ExceptionsSome properties in the target zone don’t meet the minimum lot area or width size requirements under the zoning ordinance, yet houses exist on smaller-sized neighbor lots.How could these properties get approval for development?

As others have said, the best thing your son can do is run far from this deal, buckle down, save his pennies (he probably already is doing this), house-hack, and improve a property with sweat, hard work, developing a DIY skillset, and self-managing tenants. 

Are they really any more customizable than a stick built house?