Access to utilities like water, electric, sewer, and internet plays a HUGE role in which strategy to choose.

She will get each beneficiary to sign off on allowing this to happen, lessening their inheritance cash-wise but keeping the family in a home.My idea is that the trustee daughter could purchase the home, but could do so instead through a sort of owner-financing where the Trust finances the asset to her directly rather than buying it in full at great cost and taking out a mortgage on an already paid for property:- Property is in Trust and is fully paid off,- Trust finances the property to Trustee for closer to market value, and payment can still be set at 1500- No/less down payment required- Any interest rate, maybe 0- Tenant family makes rent payment of 1500, which pays off the property and pays into Trust- Beneficiaries' % share accrues gradually as payments are made- Set future balloon payment if necessary (if Balance required at a certain time, for college, etc.)This would decrease the out-of-pocket cost for the Trustee purchaser, and increase the amount that each beneficiary will receive (eventually).I have no Trust experience, though, and I'm hoping to hear from the experts.

The lender selection is vital to a successful 203k and they area also required to select the 203k Consultant.

In places where I provide utilities I must provide within the temperature range the state requires but I don't need to let tenants control the thermostat whereas if they pay utilities they must have control. 

Since we have mortgage on the selling property,  are we required to get a morgage for new property as well or we can do all money down ?

These buildings are VERY old and require a lot of maintenance/capex.You can find great deals in all of the listed areas.

also shivani these days the way I do it is I checked the inspection report and I would categorize it, will it require 30k-50k rehab, is it 75k-100k project ?

Maybe depends on value of the house and credit worthiness of the buyer.Also 1st lienholder may not allow, depends on who that lender is and what requirements they have. 

I am not worried about the integrity of the structure, but will the bank require this to be fixed?

Yes you can, you would be required to occupy the property for at least a year.