Any thoughts on how much distance would be too far before I start loosing possible tenants?

If the balloon comes due and you dont have the money and cant finance out of it, you will loose the property.

If you do a deal and it goes bad, you will loose your best friend.

So in this scenario your maximum allowable offer should be 100k or less.These are very loose numbers, there is certainly a lot more that goes into it but this should get you started when analyzing deals.

Another thing, your post sounds like you may be under the impression that you can raise rents in a few months, but you're bound by the terms of the lease for the full time and won't be able to raise rents until that lease expires or is terminated by both parties. 

The lease was to be signed soon but now saying need more time to move that means we loose rent or give the money back.

Finally, it is important to have a good amount of reserves in case you do come into a bad period of time where you are loosing money. 

Loosing 50% of the potential tenant pool is never a good thing, but if the seller is willing to give you a discount to offset that drop in value then I see no reason to back out.

Welcome,If your dad is older he may not have a high desire to take on risk and potentially loosing everything he worked his life for.

So i was wondering is there any possible way to get into contact with the current person living in the home and offer them some cash to walk away from the home and have them put the house in my name because they are going to loose the home as is.