What I didn't account for was 6 water heaters eating up $7800 worth of what would have been cash flow. 

Nothing eats wealth faster than transaction costs and taxes.Airbnb is also a job that will interfere with your work.I'd househack. 

My expenses shoot up PLUS id eat into a chunk of our cash savings for down payment.

Like Lima one Or Kavi  etc.. easy check there.but rates too good to be true is a BIG FAT RED Flag to a pump and dump due diligence or advance fee company.

Brand new kitchen including eat-in peninsula, new cabinets, quartz countertops, tile backsplash, and all new stainless steel appliances.

Recently, 2 of the tenants moved out and I found that I had to lower my rents by $100-150 per unit per the new comps in the area, eating further in to cash flow3.

Hi Chris,When your Father was 18 in 1985, adjusted for inflation that windfall would be about $38,000.Inflation just recently ate up 10% and will probably eat up even more (and I remember when the US Government was sending money out to people freely which is the opposite of inflation, but that was a unique time and  we are not likely to see that ever happen again--so I'm not really looking at that).Where I'm going with this, is do you and your Father believe given say another 35 years, you and he could turn $38,000 into $100,000 (well $100k into whatever inflation adjustment comes out to be)?

Either he charges the guests or eats that cost, and if he eats that cost his returns don't look very impressive.

Well, you could start by sending me a big fat check of all those managed proceeds 😂

Granted-  every recession is different, so maybe I will eat crow this time!