Buy a Fire/smoke damaged properties?

[Honglian Wu]

Good evening BPers,

Help/ Advise needed :)
Today we have run across a fire/ smoke damaged property, it's off market, the owner has got paid by insurance company, he is asking ~195K, the ARV ~400K. it's a very nice 2 stories SF a bit over 3000sgft, great location. the fire happened few month ago, it was contained to the basement, but there was a smoke condition throughout the house. it was caused by a lightning though huge tree/ septic pipe to the basement, Septic, HVAC, electric & plumbing in basement, needs to be replaced . there are quite bit of soot on the ceiling of the basement, not sure if the structure is ok or not( it appears not too bad, minor burnt), basement is dry,. the main floor and up stairs looks not too bad, main thing is to clear out the smoke, no water damaged. There a 2 car garage and very nice in-law studio above, they are far away from the source of fire and looks intact. Roofs are 1 yrs new, the exterior looks good. major work will be the interior .

we are not quite sure how much will be the rehab cost, if hire GC/ Fire restoration specialist , My wild guess is it easily cost 200k at least? if not at least 150k. If using the simple rule of 75% of ARV- Rehab cost, it doesn't seem work? I don't think there will lots of flipers interested in this property, as too much work and too expensive, We don't mind to get our hands dirty but we are fairly new, we only purchased one rental properties last year. we like the idea of in-law and it looks great potential for rehab and live as our primary house, renting out the in-law ( could be easily $1000 rental), then hold or sell it couple years late, BRRR it? ;)

Here are some concerns /questions:
1) The total rehab cost, will try to get GC/ Fire restoration specialist, not sure if the owner allows, if not will put in the offer if we do decide to put one. 

2) Clear the smoke on the main floor and 2nd floor, what is the best way to remove the smoke? from surface it looks great, do we have to open each drywall, replace the fiberglass and put a new drywall? 

3) Beside the smoke, there is also concerns about chemical, the fire was through the septic pipes, wires, plumbing in the basement were melt in the hot spot, so it’s really costly to remove all the chemical consider? 

4) Insurance, it will be really hard to get insurance during the rehab process and it cost a lot… maybe i will check with few insurance companies..

5) For resale in the future, needs to disclosure fire damage and it might reduce resale value compare to market value.

6) what is the benefit for seller if offers for seller financing ? as they do get compensated by insurance company, and now the property is free and clear.

Sorry for so many questions, We are trying to analysis see what we can offer and what is best way to approach if we do put offer, Looking forward to hearing from BPers :)

Thanks in advance for any inputs!

Honglian