@Chris ConnollyIf you plan to utilize debt financing, you may want to consider investing the IRA in a C-corporation and placing the passive real estate investment through the C-corporation. 

Total Asking Price is 1.8 MillionMonthly income= $30,135Monthly Expenses (excluding debt service)= $15,003Would be looking at conventional financing of 5.25% over 25 years with 25% downOwner would also be open to seller financing

Can you handle extra debt with your current income?

I personally would like to continue buying properties to rent out every year but he feels that is risky and will lead to unpayable debt.

Foremost, do thoroughly check out the current situation regarding legality/licensing/hotel occupancy taxes for short term rentals in the city/area.

They are great for short term debt that you will pay back quickly.If there isn't a solid plan to pay it back quickly, cash out refi usually makes the most sense. 

Hello BP, I have a question regarding hard money loans and the debt-to-income ratio. 

How can they not cash flow if they have no debt?

Assuming dad has at least acquiesced to the sons' occupying, they may legally be his "guests" not his tenants. 

Caveat- I have not specifically looked into this and this is not intended to be relied upon as legal advice.The best person to ask would be the county prosecutor in charge of environmental issues, or someone at the county board of health.