Teardown/remodel planning and financing

[Mark R.]

I have the opportunity to purchase a house and lot from my grandfather for significantly less than the fair market value. The house is in a desirable neighborhood in Massachusetts but was built in the early 1900's and has been abandoned for about 5 years with leaks and significant water damage and likely to have mold. It has a cesspool so will not pass Title V. I have never purchase property before and only have my savings to work with at this time. I should be able to purchase the property for about $200k and I am thinking another 200k to build a house that should sell for 600k. There are a few challenges with this. The house has lead paint and asbestos which will increase the tear down cost. It could be possible to save a wall and call it a remodel. 

I am first trying to determine if this is a feasible investment for my current situation. 

What type of financing would be available?How much would I need to put down? Should I ask my grandfather for owner financing?(He owns it clear) I am new to the process and just trying to see if this is feasible or not. I don't want to pass up on a good opportunity.