I don't understand this strategy

[John N.]

There is a SFR near my rentals that has just come on the market. I am at a loss as to what the seller is trying to do. The back story....

This house is in a C minus neighborhood. The previous owner developed a drug problem, went to jail a few times and in her absence her business partners cooked meth, busted out doors and windows, homeless folks slept in it and so on.  The owner finally lost it to foreclosure.  Here is what I don't understand.  In tip top shape this 60 year old block 3/1 house would sell for 50-65k.  The current condition is HORRIBLE, it needs a roof and when I say roof I mean it needs trusses and decking.  The roof is sagging and falling.  All doors and windows are gone and boarded over by the city. The interior needs to be gutted.  In my estimation the house needs 40-50k in major repairs.

I have been watching it because if I could pick it up for 15-20k I was going to. (I recently bought one near it for 25k)  The new owner, an investment group bought it at auction for $39,900 and has now listed it for $64,900.  I own three houses within a block of this place.  I am pretty sure on the values in this 'hood.  What possible strategy could they be thinking?  It seems like such a ridiculous price.