I’m currently buying a property with my mother.

Mother nature can do 1 massive damage to one and not the other.

Hi Navid-To start, I am sorry to hear about your father's dementia.It is fortunate that you were able to sell his business and he invested in 6 investment properties in California 10-15 years ago and he and your mother are living on the cash flow from those.You now are thinking about expanding your father's investment real estate portfolio because California is so expensive to live for them but don't have the same experience and confidence being new to investing.This is an honorable goal and you are right to be cautious and thoughtful.You asked about whether you should cash out refinance each house or borrow against all houses to get downpayment for new properties.

I'm sure all of our mothers told us to not touch the fire. 

Even your mother.

First 3 years always paid 2 months in advance for a yearly lease  because as a mother of 5 it was conveniant for me.

I was a property manager for my mother’s investment properties before she passed with dementia, and most of her tenants paid on time, except for one I had to evict.  

Home is worth about $200k, my mother wants to rent it out for 1400/month.The tenant she wants to move in is a woman with 3 kids and a guy, income is $2720 (but my mother says the guy makes the same income).  

This keeps coming up and I already accepted her being a foster mother but now she found away she could get more money. 

And mark these mother-truckers up, they are paying for the convenience... providing you aren't somehow preventing them from buying the stuff themselves beforehand (the way movie theaters do), it's not at all immoral.