Buying a distressed apartment with insurance policy

[Jonathan A.]

Hi. I would like to know my fellow CRE investors of what u think. We are in contract of this apartment building in Kansas City, MO. 6 units, needs a total rehab/rebuild. Fire sale. Previous owner claimed 150k from insurance policy which is insured for 650k. Total rehab/rebuilt cost is 253k. Seller agent states we might be able to claim depreciation cost possibly 150k, but mostly 50k total. Not sure how insurance claim/policy rules in Kansas City, MO. Should we proceed with this project?