I think they put down around 20%.

I was thinking of maybe getting into Lake Tahoe since its only 3 hours away and so I can learn the ins and out of the business by managing it myself.

Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.5.

However, it's a deal in a different state and during the Facetime showing, I could tell the tenants were gross and makes me think they don't care about taking care of the place or their living conditions.

However, it is an old home and you are thinking about major cosmetic upgrades too.    

You can offer whatever you think is appropriate and message the seller with your reasoning.

I am exploring options - sell his place, use is as a rental or take some equity out if it to purchase another property (I was thinking maybe a short term rental on the lake)?

However, I am thinking of having my parents who are retired living there part of the year and doing STR for the remainder of the time.

I think buying in a smaller market may have been better

I'm interested to see what you more experienced professionals think of this deal as its structured as well as being in the predicament of having our agent represent the seller ( as himself) and us as the buyers.