Depending on what type of loan you try you may be able to rent it at closing BUT HOWEVER If it's not legal and you have a fire, or tenant complains to city, or the roof leaks... no permits... you can't rebuild... the city red tags the building.

2) It's fairly typical that a loss such as fire etc, could eliminate your ability to rebuild.

There was a lot of price competition to secure guests.After the fire, the costs of rebuilding soared, as would be expected following a natural disaster. 

I paid $3300 to level a 1600sf house but that also included rebuilding the framing and floor in the kitchen, laundry room and bathroom.

Alex,I am also considering demoing some of the more blighted buildings that cost next to nothing and then rebuilding as each neighborhood progresses forward.

With that amount in reserves, your best option now is to rebuild the reserves and potentially leverage any investment accounts to help you acquire the next multifamily.

Insurance said rebuild cost is $800,000, would I like to insure it for that or market value, I went with market value, cheaper premium. 

If I have to rebuild a car or a house, it's usually a loser for me.

If the condo burns to the ground the associations insurer will pay to rebuild what they own but you will need to have coverage or come out of pocket for what you own.

If it's non-conforming to zoning, then you'll have to get a 100% rebuild letter and if you the variance wasn't given in the first place, they probably won't give you a rebuild letter.