Gift of Equity, refinancing, rental

[Koay B.]

Hello,

I need advice on what to do. My husband and I are in a unique situation in where the home we live in is owned by my father in law.  The home is valued about $420k with a mortgage of $100k. We do not pay any mortgage/rent. This home is intended to be a gift at his death and or if we decide we want to purchase a new home,  he will give us the entire equity of this home after it sells. 

I love this house and we have discussed purchasing it from my FIL for the remainder of the mortgage and then getting an equity loan of $250k to fix up the house ($50k) and use the remainder to purchase a new primary residence and rent this one out.  Its in a great neighborhood with a sought after school district. We know we'd be able to rent out for $2200-2500 a month. 

Is this possible? Or is there a better route to go? 

Thanks for all the help in advance!