Everyone we have networked with says we must have skin in the game to do any kind of joint ventures/learn from them or even join a team, which we would love to do, however we basically gave our life savings to a family member to deal with a health battle.

You need to understand teen mentality.

Even if you have to sell before the 2-year mark as required by sec 121 rules because of health, work, or some unforeseen circumstances, you might still able to avoid tax.

There is a recovery/behavioral health building down there that seems to be holding the neighborhood back a bit.

I don't yet know about the health of the seller but this could be an interesting exercise even if I don't purchase.

Congratulations on the upcoming baby and hopes to great health.

just a mental exercise on how could one accomplish this.... 

If they're on disability and don't have a job or a large volunteer commitment and they're not obviously physically disabled, get a full confidentiality release of their mental health history so you can determine if you can cope with having them as a tenant. 

I would stop putting this much mental energy into this topic.

I definitely had the mentality in my 20's that you just buy the property and hey!