So without knowing all the details but basing the ones I didn't know on my house (exact same house) I came up with these figures running it through the BP calculator.This is all assuming I could get the house for a good price of around 185,000 (asking 199,000 and I paid 190 for mine about 6 years ago in better condition so may be able to get it for less) a little rehabbing (10k worth) would probably be worth around (210-220 conservatively)If I went the traditional routePurchase Closing Costs:$10,000.00Estimated Repairs:$10,000.00Total Project Cost:$205,000.00After Repair Value:$215,000.00 Down Payment:$37,000.00Loan Amount:$148,000.00Loan Points:$2,960.00Loan Fees:Amortized Over:15 yearsLoan Interest Rate:4.000%Monthly P&I:$1,094.74 Total Cash NeededBy Borrower:$57,000.00I know with renting my basement apartment for $1300 and what I could rent the rest of the house for I could probably get about $3,000 in rent from the house.The calculator put the cash flow around $800 per month (honestly that would be great but Id consider it a bonus because my goal is in the long run when its paid off to collect the rents for retirement and would probably use any cashflow in the meantime to re-invest in something else)so here is what I have in terms of fundsroughly $10,000 cash50-70k in equity in my home (based on what it would appraise for 210-240 owe 160)my thoughts were pull the equity out of my home for the down payment and maybe enough for any repairs.

Given their desire to sell (on MLS for a few months), the amount of equity I think is there and their high profile status, I think a traditional offer (low enough to have instant equity) aimed at reselling would probably be seriously considered.Any suggestions would be appreciated.

Generally you are not going to get a 3-7% down loan with traditional lenders for an investment property.

What method would you suggest is best for doing this short of paying cash or traditional financing...?  

They all prefer more traditional finishes.

That said, here are a few tips that may help with your decision.You can typically cash out your investments at any time, and lock in the current value, even in an existing plan.You could rollover the existing plan to either a plain old IRA (E*trade, a bank, etc) or a self directed IRA while you have access and consider your options with non-traditional assets in a self directed plan in the future.Within a self directed IRA, you have the ability to invest in traditional assets, so money does not need to remain idle.The type of self directed plan you would pursue is the big question.  

My dad recently retired, so he no longer has a traditional income, and though he has decent savings, his credit is spotty at best. 

ideally we would like one check as a traditional transaction, but the idea of 1500 month cash flow doesnt turn us off.  

Going the traditional route (i.e. not using creative financing) and assuming you have a W2 income that will fly with the underwriters at your typical bank, I can give you two options to start with.1) More Costly - Buy primary residence home with a 3.5-20% down loan, buy investment property with 20-25% down loan.2) Less Costly - Buy fixer upper property with 3.5% down FHA loan, 'house hack' by doing renovations while living in it for one year (to satisfy FHA loan terms).

And/or I guess I'm trying to figure out how do I analyze this differently if I were to pay cash for the property or if I do traditional financing with say 20% down, then bank loan.