Buy Grandma's House?

[Andrew Erickson]

My grandma is in a nice nursing home. Her house has been vacant for almost 2 years now. My dad and uncle are trying to deal with her stuff and everything else that goes on with that part of your life. They are coming up to the end of the owner-occupied tax exclusion since it has been almost 2 years. They are thinking they might sell the property as-is and are expecting a big discount since it is dilapidated and very "grandma-like" (if you know what I mean). 

My grandma is well off, but might have cash flow issues if she is in a nursing home for a decade. I know my uncle could just rent the place out, but here we are 2 years later and nothing really has happened. My grandma doesn't need the big win-fall of selling a home. She needs some monthly income. 

I threw it out to my uncle that I could take over managing the property. Here are some options I offered: 

• I could just buy it outright with a traditional mortgage. 
• We could do a owner financed sale (that would give her a nice monthly income) and we would have friendly terms for me. 
• We could do a lease-option. I would have to figure out how that works with renovations. The main advantage to that is the house will step up in cost-basis when my uncle and dad get it. I could then buy it from they at the new cost-basis. That way no taxes are paid on the home ever. 
• I manage the property and make a salary or commission (I hate this idea). 
• Something else I didn't think of. 

Few details: North of Portland. House is probably worth about $500k fully fixed. Nothing wrong with "the bones". Just needs a lot of TLC and updated cosmetics. 

So BiggerPocket friends, what do you think? Terrible idea? Great idea? Please don't hold back!