My first MTB Build know nothing need advice

[Timbuctoo]

Some better pics of my sons Giant so you can see. The rear derailleur is strange, no cassette, but has 3 speeds. You can also see the BB area and fork. So the plan is to rip this strange derailleur off and attach a more functional groupset and some front shocks. The Suntour forks might be the go. Reason for doing this is to ride some single track without taking a pounding.

[gohloum]

Hmmm.  That looks like a 3 speed mechanic where the gears are inside the hub and there is a spring actuator that pushes into the hub with a pushrod.  The problem you are gonna have is that frame most likely does NOT have a hanger for a conventional multi cog derailleur.  Also, the width of the axle opening is likely too small as well. 

[Midwest-MTBer]

Honestly this bike would just be a no-upgrade for me. I would clean it up nice, get it to shift well and sell it. If you really want to get a bike that your son can grow with I don't think this or carbon is the way to go. I'd recommend buying a lower end used aluminum frame bike. This years lower end Trek's sell right around $700, so you should be able to get one a couple years old for $300-$400. You'd also be able to upgrade it moderately with standard parts. I think in the end you'd save money and yourself a headache. A lot of stuff on the Giant just looks like problems waiting to happen. For example if you wanted to run a cassette and derailleur on this bike that's already bare minimum a new hub that can fit a standard cassette. I'm not even sure if the space between the dropouts would support a cassette! I would wonder about chain line and stuff too because the bike only has 3 gears to start. I'm not trying to be a pessimist and shut you down, but I really think you could get a great used mountain bike and save yourself a huge pain in the rear. If you do decide to go for it I'll be interested to see how much stuff you can get to work!