Recently I come across a short sale listed on MLS for $157,000. 

The savings both economically and in time from that commute will be worth breaking even or a short term loss by selling the house.Sorry to hear about your daughter, best of luck to you!

We were going to do it in my name since I don't have a second home in my name (our short term beach rental is in my husbands name) and my dad's name who also has no second home in his name.

So I'm trying to get qualified for a mortgage but the main source of income is our short term rental property that we have only had since March but we have made a lot of money on it..hence the $$ for another property!

Long story short,  here is the deal:-He will give me essentially an interest free line of credit.  

My experience:  (1) The life expectancy of carpet in a rent house could be a short as 6 months or 1 year, (2) in an attempt to harden and tenant proof my rent houses, I use a lot of vinyl and wood laminate plank, (3) Vinyl or wood plank lasts much, much longer than carpet and (4) the prices quoted to you for vinyl or wood planking in the Houston area seems ridiculously high for a standard size (square foot) duplex.

There are tons of posts and articles topics on this, but long story short the Midwest is your friend.

@Wayne Brooks  I don't know about your short sales.. but I know when my wife did a few and one specific I remember was a dentist who wanted to be a flipper  and was upside down about 100k.. the bank made him sign a prom note to release him.. so even though my wife closed the short sale the doc still owed 100k over time. 

So just keep it short and vague. 

Short Term rentals are definitely a different element compared to long-term (family) rentals.