Good afternoon Robert,
I'm very sorry that you find yourself in this position.
While my goal, as I stated, is to provide you with excellent service, please don't confuse excellent service with a satisfactory outcome based on your wants and desires. I can only explain the law to you---not guarantee that you will be happy with the outcome---any more than a cancer surgeon can guarantee a cure.
Under the laws of MN, any contract for the sale of real property MUST be in writing---which you say that you do not have. I presume that the title to the home is not in your name, or that of your wife either. This is problematic.
Oral agreements or promised made by your in-laws regarding any future ownership right you might have in the property is not enforceable under the law. You have nothing to enforce in terms of forcing them to transfer the deed to the property to you and/or your wife, and I am sorry but because of the multiple mistakes that you and your wife made in failing to get anything in writing, or in having your names on the deed----there is no opportunity for you to claim any legal interest in either the property itself or the equity in the property---regardless of the time, money and effort you may have put in to making the wreck of a building a livable home.
But that does not mean that there is no legal remedy available to you. There is one, but it is a difficult road to get there. Let me explain.
While you have no legal basis to claim the home or the equity in the home, you do have a chance to perhaps recoup some of the money that you personally put into the property based on the Equitable, Legal Theory of Unjust Enrichment. You would have to sue your wife's parents personally in a form of Breach of Contract lawsuit and seek equitable relief to the extent that they made a promise which induced you to put money into the property and they have therefore become unjustifiably enriched by no choosing to go back on that agreement.
You are almost certainly NOT going to win this case on your own and you really need to consider retaining an attorney to handle both the divorce action as well as the lawsuit against the in-laws. It may be possible to have the contract action against the in-laws joined with the divorce suit itself because the contract action effects marital assets that you and your wife will need to divide in the divorce process That is the only real chance that you have to get anything back out of this debacle.
You may reply back to me using the Reply link and I will be happy to continue to assist you until I am able to address your concerns, to your satisfaction.
Please remember to rate my service to you so that I can be compensated for helping you. Thank you in advance.
I wish you and yours the best in 2016,