To Buy or Not to Buy.. That Is The Question

[Gavin Welch]

I have the chance to buy a 3 bedroom and 1 bath rental house. It's in a decent neighborhood, near the university and would make a strong rental. The property can be purchased for $65K and would rent for $1000 to 1100 per month.  It is currently owned by a friend of mine and has been occupied by him for over 10 years.  Here is the problem:  The home has confirmed sinkhole activity.  I have a copy of the report.  This was an insurance loophole here in FL for a long time.  My friend had financial trouble and called in an insurance claim even though the property has no damage.  This means I will not be able to finance this property because of insurance.  This is a turnkey property that would make a great rental.  What are your thoughts?