For example, there are quality oceanfront homes for sale (as of this post) starting in the $650k price range. 3/2 slightly dated, but walk down your private stairs to the sand.

To be honest with you the numbers on this deal are very average and this is why you see a lot of investors complaining that it's hard to find cash flow and most properties that do cash flow require more money down or they are in a bad area that will not appreciate and/or will have a lot more problems.Why don't you invest out of state somewhere that has lower property taxes, lower insurance costs, lower operating expenses, and more population growth.

When it comes to the finances I am planning to get a first time home buyer FHA loan with 3.5% down and when adding the closing fees and all the other fees we are looking around $12,000 dollars out of pocket.

Eg before the sun comes up (or when she goes to bed), closing all curtains or blinds in the east and south facing windows (and later on the west facing ones) to keep the sun out; opening windows once it has cooled down at night and early in the morning (eg before 8 am)? 

I am willing to pay 20-30% down but borrowing at 7% to buy a property with 6% Cap rate does not sounds right.

My other alternative would be to save several years for a down payment.

Good questions @Charles Carillo, and my motivation with him using it as a primary is the fact that I will be able to put 3.5% down since it will be his primary versus 20% if I finance it as an investment. 

But financing even with 50% down seems to violate the 50% rule.

Headed to the NCREIA Wilmington event on July 18th.

Boils down to your cost and ease for tenants.