As the tax code is concerned all of the costs to create your rental property business (buying it and making it usable for it's intended use) and one in the same. 

We have offered to allow her to pay a reduced rent for the first few months as well but I am worried that may create some sort of limit on how much we can raise the rent on her in the future.

I am looking to create a value ad to the property.

That move created frustration on my part and the seller and had to amend the original contract.

You should consider creating a good entity either way, but especially if you are going to self manage.

The insurer does not participate in any of the insurance guarantee funds created by California law.

The mortgage will also stay on the seller's credit which might create an issue when/if they try to purchase another property.

Hypothetically, if I found a property with strong rental demand, the income could cover loan payments, operating expenses, and generate a modest positive cash flow.While this example involves upfront risks, the idea would be to leverage my father’s expertise as a contractor to minimize renovation costs, boost the property’s value, and create a long-term asset that appreciates over time.

That move created frustration on my part and the seller and had to amend the original contract.

Using equity can be a smart way to expand your portfolio, but it doesn't have to mean over-leveraging or creating unnecessary risk.