I have a question. I have just recently bought a 1986 SeaRay 21' mid
cabin. What type of weather will this boat handle? I would feel
comfortable in 2 foot waves.

Depending on wave characteristic, (standing chop on one extreme and rolling
swells on the other), the answer will vary.

Depending on your personal seamanship, the answer will vary. If you are
uncertain, uncomfortable, or unhappy.....it doesn't make any difference what
the boat will withstand. You are more likely to make mistakes if you get
frightened, and that could result in mishandling that will negate some of the
boat's designed in survival characteristics.

Personal standard? When standing chop is even with or well above the available
freeboard, it's time to get concerned. That's not an absolute, and there are
other approaches. I know a guy who tries to figure 3" of chop per thousand
pounds displacement as a safety level for small boats, and well known Pacific
NW boating author Dale Petersen ("Day by Day to Alaska"..runs to AK in a
Bayliner Trophy) has a formula based on LWL vs. wave height.

Got a small boat? Carry a great big barometer. :-)

An error on the side of caution is a wise man's error when it comes to weather.