I can get a lower mortgage rate if I plan to use it at least two weeks a year, which I will, and rent it out on a short-term basis the rest of the time.

I want to try and keep my costs under that amount.  70% gives me a little buffer encase my Rehab goes over budget or the appraisal comes in lower than expected.Then it’s just a matter of subtracting all my costs to figure out what my max offer can be.  

And, try setting the price a little lower at first, then once you get a few 5 star reviews, you can raise the price.  

If, however, you are buying it with cash and without an inspection, you could tell the seller that you can close in a few days, which might let you negotiate for a lower purchase price.In the scenario where there is a loan with interest, and the interest is all your father-in-law receives (he isn't getting any of the profit after the sale), then he is indeed a true lender and this is a true loan/mortgage.

If you can be patient then you might be able to even negotiate a bit lower price.If he finds the perfect replacement property and you're not ready to close then a reverse exchange like @Jessica Zolotorofe would be another option to save the deal.

I will look at lower income neighborhoods if the return is strong, and it's a solid rental neighborhood.

Each subsequent week, I will lower it until I get a tenant that I approve of.

Additionally, I will add:-I don't think 38% expense ratio is being conservative, being at 50% is conservative and some buildings exceed this-bank won't even lend on a deal with a DSCR that low, you need to underwrite to at least a 1.25 or the deal won't get done-figure out what financing vehicle you're using, agency debt (Freddie) is possible at a lower LTV and interest rate but comes with requirements, community bank is tougher to get 30 year am on-I see nothing about exit assumptions, you might have to refi/sell after 5 years with higher interest rates and a softer market...then what?

I believe you can keep your maintenance costs much much lower by maintaining it yourself (with the help of handymen, plumbers, etc.).

However, they lowered the price on the property and then I offered a little bit lower than that, and they need to close, so they excepted it.