Selling vs Renovating vs BRRRR-ing Family's Long Time Property

[Julian Martinez]

My dad and his siblings (6 people in total) inherited my grandparents' long time house and they're trying to figure out what to do with the property. They have a cash offer in hand (see #9 below), but as a Real Estate Professional, I'm trying to figure out if there's a better play for them and/or as an investment property that also keeps the house in the family (we've owned it for ~80 years). 

Property details:

1. Currently, it's a 3 bed/1 bath SFH, total square footage of 1900 (per official records), but there's likely more "livable" square footage given second story space and basement that can be converted (with a lot of work).

2. The house sits on an oversized lot- 9k sq ft lot (0.20 acres), one of the largest in the neighborhood 

3. It's in a C class neighborhood, central to town, just a couple miles from the downtown area, close to freeways, but the neighborhood itself has always been a bit rough. 

 4. The house is technically livable, but as is, it needs a TON of work to get market rate renters or to sell it. There's a bunch of deferred maintenance and hasn’t been renovated in decades- I'm scheduling a GC to go look at property and give me estimates, but safe to assume it wouldn't be less than $50k, at a minimum, to get it to point of being presentable to renter or buyer.

5. Redfin estimates it at $346k, Zillow estimates at $287k (with a range of $227k-$338k).

6. If we tried to list it on the market, realtor thinks he can “slap some lipstick on a pig” and list it for just under $300k, maybe get a little bidding war mostly because of the lot size, but it  would require a big trash out and at least minimal cosmetic touch up (estimated cost of ~$10k for trash out alone).  

7. If we rent it out as a SFH, we should be able to get ~$2k for a 3/2 (possibly more), but it would require us to do some maintenance.

8.There’s no note on the property- family owns it free and clear. The kids would prefer to unload it and take whatever cash they can get.

9. We do have cash offer in hand- $225k and they’ll handle everything, trash out, renovations, everything. $225k to walk away (which then gets split 6 ways).

Question:
As a REP, I'm wondering- is there a better play than $225k cash (which seems almost insultingly low for a long time family property on an oversized lot)? Add more doors- e.g. convert SFH into duplex or triplex, and/or add ADUs, and build for cash flow? Or a BRRRR move? Or reverse mortgage? Or some other play I'm not seeing here, or is the $225k cash offer best move right now? They wouldn't go for seller financing (split 6 ways, there's not enough to go around monthly to make it worth their while), so I can't see a creative financing play.

Would love any input or recommendations. 

Thanks in advance!