Yes, we'll be living in the house and working on it before we own it. She is fully aware that we will be renovating the house and encourages us to do so. It's in a place right now where even if she were to sell to someone else she would need to fix them before she did so. Right now the agreement is that we'll be paying our "rent" with repairs (we're allotting $500/month), though that may change when we get closer to the move-in date. It makes me a little nervous that it may create resentment that she's still paying the mortgage, but we'll see.
Question: Would it be wise to get an appraisal/inspection before we even start repairs, or should we wait until we're closer to the date that we would buy? If feel like a lot is riding on how much we'll be able to buy the house for and until then it's unsure as to whether or not we'll go through with the buy. Would that possibly screw her over on a lower price?
To make matters a little bit more complicated, she bought this house about 20 years ago for around $100,000. She still owes around $85,000 on it. I'm not totally sure why this is, but from what I understand it has to do with her, well, lack of mustachianism. This is one of the reasons that she wants to sell the house, mostly to get rid of it.
CasFlowDiaries: We don't know how much we're going to purchase the house for, since we don't know how much the repairs factor in. I guess my question above goes into that. For cost of renovations, we have to talk to the neighbor that is currently helping her do some repairs to get a rough estimate. The roof will probably be the biggest expense. For rent, we're thinking $1200/month, from looking on Zillow and surrounding rent prices. Based off of that rent price we'll need to purchase the house for less than $120k to make a profit.