would you buy a house and rent it to person you bought it from?

[Rochelle Wilkinson]

My husbands uncle ( 70 years old) has a home he owes about $50,000 on.. current mortgage is $650.. he also has some credit card debt to the tune of $10,000.. with his social security he barely gets by and counts every penny.

Here where the real estate investment part comes in...bare with me

The home is in dire need of rehabbing.. but he has no money to do the repairs.. in the current state the house might fetch $110,000.. comps in the area for moderate upgrades sell for $185,000-$210,00..

He considered selling cheap to get out and buying a condo.. but he would still be cash poor.. he figures what he could sell the house for would pay off the credit card debt, and give him some money down on a condo.. At which point we would want to buy it, rehab it and rent it.. but here is my question.. he is perfectly fine with the outdated kitchen.. and outdated bathroom.. would it be totally CRAZY to buy it for say $110,000 and turn around and rent it to him?? My point to him when we talked about it was, you can pay off your credit cards.. cash out to travel a little and still be in the same house.. enjoy the money now while you can.. I know about reverse mortgages.. this is not what I'm talking about.. I'm talking about buying the house at a discount, and renting it to him for about what he pays now for a mortgage.. except this way he will walk away with $50,000 to pay off bills and maybe take a trip.., we would be doing him a favor, but I would also be getting a great deal on a house we could later rehab ( causing forced equity) and rent ( cash flow).. yay? or Nay? pitfalls, and has anyone done this before??