Auction house overhaul

[Joseph H.]

I recently bought a property from a tax lien auction for just under $4,000. From the pictures of the outside it looked ok but obviously needed some work. It was a small 2:1 with a shed for a garage. I had drove and looked at it a couple of days ago and it is abandoned and needs to be dozed over due to structural instability and cost to remodel. My questions are: 

1. Has anyone had experience with this type of situation, and if you have what did you do?

2. Scraping the property and replacing it with another home is possible, and what is a cost effective recommendation for a replacement. 

My thoughts are to go with an unfinished modular home or pre-fab and have it customized. The current house on the property in livable condition comped in zillow (not the most reliable source but close) for $90,000. The house is the worst house on the block so there is room to play with values.  I have only had experience with a handful of rentals and this is my first time with this type of situation. Any advice would be helpful.