[Calc Review] Help me analyze this deal - Lake Elsinore, CA

[Kurt Michaelson]

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*This link comes directly from our calculators, based on information input by the member who posted.

The property has been vacant for at least a year and had suffered fire damage too (see link to pics). The previous tenants were trying to conduct a chemistry experiment with marijuana and something exploded causing the fire. It was renting for $2,200/mo. ($26,000 is lost income due to the fire).

The property is owned free & clear too, but the owner wants to sell it for $400K As-Is. It can be subdivided to add another 1-2 new construction homes on it, per the county planning department, but I still want to research this to understand it more clearly.

The owner said he wants to be "free of this headache," but I'm not quite sure it's a bad enough migraine for him at this time. He said he's willing to sell to me, but he talked also of fixing it up himself, but he'd consider selling it to me.

This house isn't worth $400K, but more like $200K especially with the rehab that's needed. 

I think he's thinking the whole 2.3 acre lot is worth $400K (to him) because he kept talking about the opportunity to build 1 or 2 more homes on the lot, which, if they were rentals they would bring in additional income.

Here is a link to the photos of the property from the visit:
https://photos.app.goo.gl/CNjZZyLRyRNkmCRg9

The owner called me a few hours later on Saturday afternoon, to ask what I thought about the property and buying it. He didn't sound satisfied that an offer of $200K was good enough for him to sell it to me. 

Any suggestions?