Outbid by a local government organization?!

[Sebastien B.]

I just found out that the local housing authority just blew all the other bids out of the water (think $500k when offers and asking price was at $410). Now I have to figure out if its worth trying to beat that price.

Has anyone had experience with this? Is the local housing authority simply overpaying? I have checked the numbers, and it technically makes sense still, but buying at this price would require me to try and demolish the current structure or at least significantly add to the current structure in order to make a decent return...