There are complications with the different scenarios you pose.
For example, he undoubtedly applied for a loan, stating it would be his primary residence. Read the loan documents closely, but there may be penalty provisions (up to the lender being able to demand full payment) if the lender believes that your son lied on his mortgage application. I understand from your question that, at the time he applied, he hadn't received the family member's offer. Still, from the standpoint of a lender, a guy comes in, says he's planning to buy a house to live in, then rents it out instead.
Rent with option: It's unlikely the rent payments will come close to the mortgage payment. I know that certain areas of Michigan do allow people (such as investors) to buy and immediately rent out for a positive cash flow. But you'd really have to check that out. Find out what the rents are for that type of property. Take into consideration all the costs of ownership. Then reduce the rental income by 25% to allow for vacancies, repairs, and maintenance. So, for instance, if all the costs of the property--principal, interest, taxes, insurance, and HOA fees (if any) are, let's say $750 a month and the going rent for the property is $1,000, that would basically be a break-even situation. Do those numbers work for you?
Resell? Not unless he bought substantially under market. The transaction costs in selling a property can be roughly 10%. Realtor commissions, certain transfer taxes, settlement fees, and so on. So let's say he paid $180,000 for the property. Very rough ballpark numbers, he'd have to sell for close to $200,000 just to break even. And that doesn't include any holding time (monthly mortgage payments).
Talk to a good real estate agent in your community. He or she will be able to fill in some of those missing numbers and perhaps give you some suggestions.
Hope that helps.