Upon entering Act 2, you'll find yourself in a much larger, distorted version of the Neighbor's house. The layout is less logical, with rooms stacked on top of each other and impossible architecture. Your primary objective is to find several colored keys (Yellow, Green, Blue, Purple) to unlock various doors and progress. Each key is typically associated with a specific puzzle or area.
Start by exploring the immediate surroundings. Look for pathways that seem out of place, like a door leading to an outdoor area on an upper floor. The Neighbor's AI is more advanced here, adapting to your strategies. He will place more sophisticated traps, such as bear traps, cameras, and tripwires. Always be on the lookout for these. The Yellow Key is often found in the 'Giant Chair' room or a similar oversized environment, requiring you to climb or manipulate large objects to reach it. Use throwable items to distract the Neighbor or activate distant switches.