My mother-in-law wants to help my husband and I on our first real estate investment purchase. 

When the home was purchased, it was conventional loan and the basement had tenants.

There are no restrictions preventing out-of-state investors from purchasing rental properties in Texas—these investors enjoy the same opportunities as Texas residents.Additionally, the financing restrictions you mentioned don’t align with reality.

With a purchase price of $250k, your rent is WAY too low!

The latest red flag is his belief he purchased a "fully renovated" property in Philadelphia for $115K.

It may be a little scary but if you go higher on your purchase price, 400k and up. 

But one thing is for certain - if it's off-market, you have a much greater probability of getting to the the desired purchase % you are after.

Purchase price: $375,000 Cash invested: $30,000 This was a 2 unit that I purchased in 2016 for $375K.

I have helped many investors purchase LTRs in Little Rock,AR, Memphis,TN, and OKC.

It seems that if you can find a good deal on the purchase price, are willing to do cosmetic updates (floors, painting, maybe a kitchen) you can get that 100-200/month cash flow.