possible rental opportunity

[Aaron Vitiello]

I'd really appreciate feedback from those with more experience on this situation.  

Background: Spouse's grandfather passed away recently and left his 4 bed 2.5 bath home to his eight (8) kids equally. House has not been renovated or maintained in decades and is probably going to go on the market optimistically at $130K based on comps in the area and the work it needs. Renovated comps in the area that are slightly smaller are listing at $230-270K. Rent in the area is fluctuating between $1200-$1600.

We were thinking of proposing the following the executors (spouse's stepmom + siblings): gift us the house, we rehab it, then cash out refinance on ARV to pay back the rehab cost, as well as give the executors back what would have been the market price + 10% as an incentive (not to mention they don't pay realtor fees or closing costs in this scenario). They do not want to do seller finance with monthly payments; majority of the kids want the money sooner than later.

Does this scenario seem doable, or am I missing some kind of legality surrounding paying back property that was gifted? Are there crazy tax implications? Is there a better way of approaching this? Thanks in advance for thoughts and feedback!