But you have to understand you may get monthly cash in your pocket, but you'll have more problems and little appreciation.

Leveraging equity does involve some risk, so it's important to have a sound strategy to avoid overextending yourself.

I would agree if we were talking about financial statements, but as I understand it, we are talking about tax basis reports.For tax purposes, one can use a modified cash basis when filing.

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.

I had to go that far away due to the insane cost of real estate in Boston, so I fully understand the predicament.

My understanding is that the ballpark standard of "unless it would be outrageously tough" (something along those lines) is what applies if you're doing a rehab, seeking new permits, doing structural changes anyways, and things of that nature.For existing pre-ADA structures, my understanding is that the standard is more along the lines of "if it can be easily/cheaply done, you have to do it."

I'd also like for them to be aware of costs like insurance and taxes, so that they have a better understanding, but I'm not sure that's really that important.

I understand that these rules vary depending on the state, but any thoughts on this?

While I understand you want to buy the house, you are at the mercy of those that your relative sold the property to.  

I do not understand what it is you are trying to do.