Alternatively, I was considering doing number 1 & 2, and a Lease-Option so that he could buy back the house in 5 years, but since the mortgage would still be in his name with the Sub2 portion, he would likely be unable to get another mortgage to buy back the house.

We are, of course, always on the lookout for deals across many different channels, however our deal-seeking efforts this week are concentrated on reaching out to property owners found through county offices, title companies, and research done out of our truck windows! 

Check out The Book on Investing in Real Estate with No (and Low) Money Down by Brandon Turner.It does a great job of outlining stuff like owner-financing, portfolio loans, and private money as an alternative to conventional mortgages. 

Chances are your new employer's 401k won't allow you to invest in alternative investments.

Additionally we've learned that we may run into major issues with the township on this if we do repair it.I am looking for advice on alternate options to deal with this problem.

The neat thing about a timber harvest permit is you can build logging roads under this same permit  No inspections nothing.. well our logging roads happen to be right were we would put our access roads for the short plat.. the landings  ( were you stage the logs to be loaded on the trucks) would be our building pads..

costs: 2 title costs +  1 finance closing costs (vs 2 title, and 2 finance closing)The alternative is to buy with financing, and then cash out financing later (or leave $50k down + $50k rehab investment in property)

@Diana Tian, Do you have access to a pickup truck?

Your alternative is a longer row to hoe, but can be more lucrative for you (savings on property and management).

They will have no alternative except start renting apartments.