Thoughts on structuring this deal

[Brandon Riley]

A elderly member of my extended family (Dad's step-father - I don't know him) has a Single Family home in Mesa, AZ. The house is probably worth in the neighborhood of $175-180k post rehab. The house is in very rough shape including a roof that's been leaking for years, concrete floors, stripped bathrooms, you get the idea. Rough estimation is $35-50k+ depending on how bad things after we start removing drywall.

But my question is less about valuing the home, and more about how to structure the deal. There is a very small mortgage on the house $315/mo or about $15k total. They have no means of paying for any repairs now or future upkeep. The 80 year old man wants to remain in the house until he can no longer care for himself. He has in home care 3 days a week, but isn't "sick-sick" with anything life threatening. He gets social security (I think) of about $1,100 monthly.

The proposed plan is me paying off the loan, rehabbing the house, and letting the man live out his years there (I would own the house).  They love the idea of keeping the house in the family (I have other rental properties) and don't mind if I "get a good deal."

Anyone have any experience structuring a deal like this? 

Does this even sound like a good deal (let's stick with the assumed values/costs outlined above)?

Is it unreasonable to expect a low monthly rent payment of $300-$500 to offset the cost of property taxes, repairs, insurance?