Buying my sister's underwater house

[Kavi S.]

My sister is looking to sell her house and there HAS to be something I can do here. Off the bat, I'm doing this to make our entire family better off, not just myself.

My sister bought a foreclosure for $230k-ish, my mom was her lender. She renovated it with the same lender, who now has about $300k into it, it's worth about $350-$375k.

Then two kids and a part-time job, she can't really afford it, she and lender are a little uneasy. She wants to move closer to home in a cheaper location where my mom can babysit for her and she can afford her lifestyle. She's looking at condos in the $200k range and would need a downpayment of about $40k, which she should be able to scrape out of her equity. 

I already own 3 units, my mom (her lender) is considering working with me to add this to the collection. My sister needs a downpayment for the new place, and I'm not sure my mom wants to play lender there again. Complexity being that my mom is retired and doesn't want ANY income for whatever financial planning reasons and she doesn't want to do the work, but she's liking the idea of keeping the wealth in the family and we've had a very good financial relationship for my entire adult life. (adult being an important distinction, I didn't get allowance when I was a kid, ugh) 

I'm thinking what I can do is let my sister list it, have her figure out what market value is so I don't have any family battles over fair value and her time renovating it. Then I take out a commercial loan for ((market_value+1)-$300k)=$50-75k-ish,  buy it for market_value but only pay her the difference, somewhere in the closing docs have my mom "forgive" or "re-assign" the $300k loan, and between her and I we would have a separate agreement and I'm not sure of the terms. I would want to figure out a way to split the rental income between myself and my mom. 

Alternatively, I could "buy the place for exactly what's owed," or have my mom "assign" the loan to me, then take out an equity loan against the place to give to my sister as a downpayment, and I can pay off that equity loan with the rental income as well as pay back my mom's $300k. This is probably a cleaner approach, but I worry that a sale this low is going to devalue the neighborhood. (Is that a thing people care about? When I bought my place in Boston, the neighbor's houses gained $50k in equity overnight) Or maybe I can do the $1 in-family sale? 

Any other ideas?