I am hoping for cash flow, equity, appreciation and tax benefits.

Hey @Greg Teplansky, so I think everyone hit some nails right on the head.Get an attorney and CPA to go over the details. this is a lot of work to do correctly and it will cost you.I don't think you are outta your mind but I think there is little benefit to those that buy in.

Lower wealth individuals get less benefits. 

Also factor in whatever tax benefits there may be in the new investment vs what you have now.As another poster suggested, are your tenants currently paying market rents?

I see benefits but I'm trying to understand the full context of building this from ground up.

If I do get any objections I tell them this, it's a huge benefit of going the sub-to route.

House hacking gives you the ability to learn firsthand what it's like to be a landlord, offset your mortgage using the other unit and to reap some tax benefits.

You can, but you will only have 1/3 of the total cost segregation benefits, and only for one year.Read this: https://www.biggerpockets.com/forums/51/topics/1122635-the-s... 

This group does allow syndicators to present deals, so your father would get deal flow, but he would also benefit from a wide group of other passive investors discussing the deal and sharing their thoughts.

I'd discuss how it would benefit them to lock in the amount with a lease.