You well point out that real property encumbered with a note is a liability, as well as an asset. However, people that make money on real property often have a variety of ways to limit the costs you have dealt with. One example would be distressed properties. I remember looking at properties in PDX for as little as $9k cash, but they were gutted by bad tenants. Another, preferable gambit in my mind, is distressed sellers. The problem your dad faced when the local employer folded is a good example, because there were probably folks around that suddenly couldn't pay their mortgages because the worked there. Either they sold quick, or they lost everything. Prices go down fast in that scenario.
Private financing, and paying principal faster than it's due, sweat equity, these are all means of dropping costs to get into properties that I have used, and were very effective. The main trick I used was to avoid banks as if they were infected with the plague. Despite that I did exactly that didn't prevent Citi from getting it's hooks into me, because they just bought my lender.
Ugh. Nothing is safe in this world, but there's life before we die, at least. Anyway, my point is that just lining up for your beating is rarely a reasonable course of action, and clever people can find ways to improve their potential by looking outside boxes.
Thanks!