Should I do this house flip?

[Samuel Hill]

My Great Grandfather built a house in north St. Paul in the 60's. my grandmother has been living in it since it was built but she has reached the age where she cant live alone and everything is falling apart in that house, so she moved in with my uncle. My uncle is thinking about selling it to cover her medical costs but my brother and I want to keep it in the family since that is where we grew up and we would like our kids to enjoy that house too. It is in a great location. We haven't had an agent  or and appraiser value the home but I would say it is about $150,000 - $200,000 in its current condition. The neighborhoods average sale price is $300,000. The options my brother and I have come up with is gut the entire house and rebuild it with modern materials and up to code. When it was built they didn't do any of it to code. Our second option is to tear it down and start from scratch. We think the best way to bring in income is rent out the 6 bedrooms individually. We can rent each room for $500 to $750 a month. I just don't know if its worth investing in or just letting my uncle sell it. It will probably get sold to a flipper and I would hate to have them make all the profit when my brother and I can do it and it would stay in the family then. I would Appreciate any input on the situation.