Is there an emotional attachment to it?

Also Remember a vacation rental is a short term rental for people on vacation or living in some type of temporary condition. 

In this business there is no room for compassion or emotions of any form.

You would be farther ahead to consider her financing as temporary Get bank financing as soon as you have built up enough equity with your mother-in-law to cover a DP with the bank.

Your leverage is that the owner be so emotionally attached to the sale that they want/need it to go through.  

That seems tedious but data is available and your friend when it comes to larger picture and it takes the emotion out.

Paying down my debt does not make the most financial sense but emotionally for me it does.  

There are people that offer 100% homes and the rehab/repair money but I have seen a few of those providers make money of of your loans but do not state that and mostly talk about themselves and do not tell you about their charge to do that, so be careful of them and others that make sales based on your emotion.  

Take a non emotional approach and there is a glut of empty commercial properties for sale everywhere.

Sounds like a temporary value hike, with longer term ramifications once the consequences of these investment decisions are revealed.Stop the madness...