Fix it now rather than later even if a buy and hold.

My advice is to just get a professional over there to fix it and move on.

Maybe some sort of fixed HELOC?

I would make sure they understand you are taking on the burden of fixing up the place, and I would be buying it now before they spent all their time and energy getting it fixed up...The more time and money they spend the more they will expect at the point of sale.   

I fix up the property and sell it for 380kHow are we supposed to split the earning? 

Even if you fix it up nicely being it in a high crime area you will have nothing but problems. 

He says he doesn't want to fix it or pay taxes on it for much longer.

If you can I would invest in a dilapidated home that you could Fix and Flip and resale for a profit from it and I would invest in a similar way or some other investment that would make you money.   

A few options we're considering as alternatives to paying in cash ourselves:Having the seller fix some issues before purchase (we're in the process of post-inspection renegotiations).

The part that I am really struggling with is being able to walk through a property, see the state that it is in, and determine how much money I would need to fix it up to realize that forced appreciation.