Since there are several types of trusts, and each have their own benefits, an Attorney is a good person to evaluate and guide you down the path of creating the correct vehicle to protect your investments, while creating tax benefits.If you decide to consult an Attorney(s), make sure you pick one that understands the following subject matter: estate planning and trusts, REITs, Federal & State Taxes, business entities, real estate, and Family Law. 

If there's a mortgage, then a subject to deal.I'm thinking this is a free and clear deal since they are willing to walk away.

There are definitely some great areas in Oakland, and condos aren't subject to rent control, unlike an apartment building.

Or you may be able to sell it, subject to the buyer assuming your relatives loan. 

It depends upon your strategy and what you're looking to accomplish both short term and long term.The issue with using a HELOC for long-term financing is that your interest rate is subject to change over time, unlike a fixed 15, 20 or 30 year mortgage. 

There is no apparent pain here for you to remove from their life.That being said, if the sellers would enjoy a superior steady income without the liability & management that comes with property ownership tenant, you can make a case for them to let you buy the how subject-2 their 1st TD.  

I would separate the subjective from the objective first.

Use zillow to get the comps you need to come up with your own estimate.To me, I have a pretty simplistic approach to estimating.In Zillow, I enter the address of my home and click submit.I then modify the default filters based on my subject property's key characteristics: Bedroom count, square footage and age of home. 

Both the DFW & Houston markets are huge and extremely diverse. 

Short term capital gains are not subject to self employment tax, while ordinary income can be subject to self employment tax based upon the source.Talk to a CPA, happily pay for the consultation.