Which options do you guys think are best when you have no money to put down on a house for flipping?

My wife and I got a duplex downtown and are house hacking one unit. 

This works best when the seller is motivated and open to flexible terms.4.BRRRR Strategy (Buy, Rehab, Rent, Refinance, Repeat)– If you find the right undervalued property, you can finance the rehab with short-term funding and then refinance into a long-term loan, pulling most or all of your money back out.5.House Hacking– If you’re open to living in your investment, you can use an FHA loan (as low as 3.5% down)to buy a multi-unit, live in one unit, and rent out the others.

Use the two years to learn the area and I would suggest as soon as you can, find a duplex and start a house hack. 

If so, you may be able to wholesale the property to someone (perhaps even someone in one of those $400,000 houses) in such a way that you and your grandmother come out whole.

Follow These Steps BEFORE You Start Flipping Houses in 2024 - it goes over the basics, choosing locations, etc. 

Taxes are reasonable (in most areas), and there is a significant lack of quality affordable housing.  

House hacking is the BEST way to get started in real estate investing!

A friend of mine bought some houses from them that he thought were occupied and running smoothly because rent checks always came through on time.

Sounds like you should go the house hack/FHA route.