House is "Falling Into My Lap" - Should I flip It?

[Hilary Hageman]

A friend of the family died, leaving a large older home that he paid $160K for many years ago.  He left the home to his sons, who aren't the most enterprising individuals (to put it kindly.)  The house has sat vacant for some time and although only $30K is owed on the mortgage, they have become delinquent on the payments because they're too lazy to sell it.  The house itself is a colonial/farmhouse style that would be absolutely gorgeous with a new coat of exterior paint.

Should we try to take on the existing mortgage and flip the house?  We'd obviously get an inspection and a better look at the interior, but the last time family members were inside they said they believed it just needed cosmetics.

I'm a little nervous about flipping because it was never in our "game plan."  We planned to buy and hold, building passive income through our rental properties (our first prospect is currently falling apart in the post-inspection negotiating phase).  What do I need to know about flipping vs. renting a house?  How is rehab different?  How are the costs different?