Our Lease Contract doesn't currently say that all payments will be applied to non-rent charges first, oldest to newest, but it also doesn't say anything about how we may allocate the payments tenants make to us.

You will be able to save money on the mortgage payment by having other units to help contribute.

If you are buying or refinancing an investment property, you can use a DSCR loan to finance which doesn't consider your DTI or income to underwrite the loan.DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

I have a spreadsheet of how profitable I am going to be with the deal and these are the numbers: 245k purchase price, 20% down (49k) 7.2% interest giving me about $1,330 payments, looking at neighboring rentals with the same layout and interior I can potentially rent it for $2,200 hopefully but I expect the worst. 

This is due to the fact that many lenders provide various loan programs with various periods, interest rates, and minimum down payment requirements.

Plus, usually no payments are coming in during that time, the tenant(s) may need to be evicted, the property usually sits vacant and comes back in worse condition.

Other than explaining how his children will continue to receive the payments after his passing what can I do to get him on the positive side of creative finance?

I'm sure you can still buy in Tulum and cover your costs if you rent when you're not using the property provided that 1) you don't use the property too much of the time and 2) you pay 100% in cash so you don't have a mortgage payment to cover.

At 7.5% your monthly payment is around $1,400 not including taxes or insurance.

For a fix n flip, if your purchase price is 500k and 200k is the remodel, what is your monthly payment on the 6 months of rehab?