I would highly recommend working with a broker that really understands the nuances of this style of loan as each lender has different credit requirements, leverages, and ownership requirements. 

@Michelle MayfieldI am a real estate agent and investor in Houston, TX.Katy, Cypress, Spring, some parts of Houston, Conroe, Tomball, Pearland are great markets.These cities tend to command quality tenants, and they have great schools.Get in touch with a local agent or investor and shorten your learning curve and save you a lot of headaches as they tend to understand the market better.All the best!

When I look at Zillow, the rents are about $200-300 under market, for comparable quality units.

The second property will be purchased with a mortgage (you can determine how high or low the leverage will be by adjusting the proceeds you use or the price point of the 2nd replacement).You are adding some measured debt at a level that your dad can be comfortable with. 

If you're looking for more connections, I would highly recommend attending some local real estate meetups in the cape cod area.

MICs generally charge a lot in points and have high rates, and typically won't lend above 75%-80% of purchase.Some brokers will also have access to private individuals who are willing to lend, which can be more flexible.

Even if FSBO folks make a mistake, I doubt very highly it will be anywhere near that amount of money. 

Here's a few things I highly recommend, start by tuning in to the BiggerPockets podcast.

But with mortgage rates the way they are and with inflation high do you guys think its a good time to buy?

Obviously you want to push rents as high as possible, but you've got to know how to stop before creating an artificial turnover.