Help! How much should invest in an inherited fixer upper?

[Kyla Nicole Nickerson Jones]

Hi BP!

My grandmother recently passed and left my brother and me a windfall. Three houses (zero morgtages) all within the Central District, Seattle. Prime location! My brother and I have no interest in selling but eventually plan to build a few townhouses on the site. 

Right now the houses are in terrible condition - like 30 plus years of neglect, almost condemnable. Our plan was to spend some money getting them to renter-friendly condition (by borrowing against the properties/ no money down). However, we've received some sticker shock. Like, our budget of 50-60k per house is actually closer to $110k per house. Now, we're faced with how much we want to invest in homes we eventually plan to tear down. Our plan was to wait 3-5 years to begin building. 

My immediate plan was to hire an inspector to see what is a priority to fix in the short term. 

A few questions: 

1) Should we just demolish and pay maintenance costs - and not gain any rental income? 

2)  Should we refinance the homes and just take the minimal cash flow? 

3) What are other options I'm not considering? 

Thanks!