How to help out Family by flipping their house - HELP

[Steven Swider]

Hello All, 

I'll get straight to the point. 

My Aunt lives in her house that is in my grandfathers name (long story). She wants to get out but the realtor told her she'll need to have around 70-80K in renovations done. She cannot get a loan because of her credit situation and my grandfather is in the process of selling his house to move out of state.  My Aunt and Uncle (at the time) put down 150K towards the house and her mortgage is around 80K.

My thoughts/options:

1. I'd like to purchase the house from my grandfather for the 80K, get a loan/mortgage out for a total of 180K so I have 100K to do the renovations. Every house in her neighborhood is listed or has sold for at least 350K in the past.  So my thought is to take the 180K and turn into a sale of 350K and give her some profits from the sale. 

2. Purchase the house for a specified amount that she would like out of it (150K) and then take out the 100K to do the reno. So instead of having a mortgage/loan for 180K it would be 250K but then my Aunt/Grandpa would then have her money in her pocket and will have nothing to do with it anymore. 

Sorry if this is confusing I just want to know what is best option or if there are others that I am missing. Thanks in advance for you thoughts.