Edgar Hernandez I agree with Mindy Jensen that you need permission.

However, it would be worthwhile to get someone to assess the quality of the land to make sure a structure can be built on it in addition to clearing up the red tape (permission from city/county etc)

The other option is to visit him in jail and have him agree in writing to move out and give you permission to move his belongings or have him arrange to have someone else pick them up.

The buyer takes the property "Subject To" the existing financing and takes over the existing loan, but does not assume it (assuming is a legal term and requires written permission from the bank). 

Do I need to jump through lot of hoops(permissions) to construct?

Get permission from your lender to do the Wrap- Around Mortgage. 

@Blynn KellerIt is absolutely permissible to do a 1031 exchange for a vacation rental.  

(That's the quick and dirty version anyone wanting the long version let me know)If you cannot get permission to live off base but have 40k to invest you should start looking around for pure income properties.

Got to be done properly by an estate planning attorney.To piggy-back on @Allen Fletcher 's idea of buying sub2, it is not illegal to take over the mortgage without the banks' permission, but they may call it due on sale.  

I am hoping to be able to work with them, with the permission of the estate.