She doesn't want him to leave because he helps to take care of everything that his son never would, like picking the kids up from school, fixing things around the house, mowing the yard, and taking out the trash.

I house-hacked this. 

GSEs are entities established but not operated or owned by the Federal government to (oftentimes) enhance credit availability, in sectors that have some sort of public good connection like agriculture or housing.

Would you be able to move to the new house before your retirement in 10 years? 

Since moving into another fixer-upper isn’t ideal right now, consider leveraging your $40K for a low-money-down investment, like house hacking a small multifamily or using creative financing (seller financing, subject-to, or partnerships) to avoid tying up all your capital.

Hiring a manager or Pad Split still means you’re in the BUSINESS of running a rooming house. 

I’ll let readers decide how they want to interpret the facts I stated.The underlying investment was student housing.

If the house hack is renting rooms within your house; tax wise likely worse because you can only depreciate the fully rental areas (bedrooms and maybe bathrooms).

Your margin for error on a house that is valued under $100k is so tight.

I can't say what's best for you, but I can tell you what I did for my first house.