The basics are you find someone who will sell a house at a discount because of the condition of the home or some other special situation like death or divorce. 

We've really updated/remodeled and made our current home awesome and in move-in ready condition (new carpets, paint, fireplace, remodeled kitchen, remodeled bathrooms, custom tile, etc...).

The condition of the house, the property size, location, age of the house, finish work, etc. all weigh in to valuations.

Structures are like people in that the inner condition is reflected in the outer condition, thus any readily apparent deferred maintenance is a harbinger for more problems waiting beneath the surface.

I suggest you not go 30  years with a note going to an estate, your high school buddy may very well look you up with an unpleasant attitude messing up his parent's estate in their elder years, but check with an attorney familiar with estate requirements.......you can also address such issues with a conditional demand feature, if this happens then they can demand full payment in 6 months for example.

Insurance seems a little high.... perhaps because of the area or the condition of the house? 

I can't think of a time with this set of economic conditions.

I would SHORTEN the lease under these conditions, at lease to 6mo, maybe back to 3mo. 

Property owner is financing a relative/friendOtherwise, a seller can sell to a buyer able to get conventional financing and cash outIn certain instances, an owner may be willing to owner finance even if the above conditions are not true.  

If you don't know how to assess condition/age, home inspectors could help with this.