Market Values and Replacement (reconstruction) Costs or Actual Cash Values are not typically inline with one another. 

The insurance adjusted (IA) mentioned, it will have to be re-constructed along with adjacent townhomes as well (total 2 rebuilds and 1 partial rebuild).

Qualifying real property trades or businesses include property development, redevelopment, construction, reconstruction, acquisition, conversion, rental, operation, management, leasing, or brokerage trade or business.

3. if the previous owner does not come back, then does the mortgage company ( it looks like there is still $280,000 mortgage principle balance) will ask for the whole amount from the new owner (Me) or they more likely to work with the new guy to reconstruct a new mortgage deal. 4. if the mortgage company does not work with the new guy and forecloses the building, and if the sale price did not meet their mortgage principle number, will the new guy ( me) loss the money which had used it to win bid in the upset sale ($60,000)? 

Aloha,A lot depends on your specific RE/construction/finance/law related knowledge and people skills.

Agents all use similar software to come up with their reconstruction estimates - there are maybe 3 or 4 software programs for this. 

After so many awful contractors, and paying large amounts of money for two different projects to be reconstructed, I have taken to figuring it out by myself. 

Every inquirer that spoke proper english was immediately turned off once they verified that it was a duplex vs a SFR.Buying SFR for way below reconstruction cost prevents another conglomerate from going down the street and building the latest and greatest apartment complex and putting downward pressure on rents..Multiple exit strategies with SFR...

I have found in the past, especially when the property is free and clear.That the owners are willing to just take the insurance money and move on.So it might be worth giving them a low offer for the property as-is and then re-construction a new residence.

If I'm looking at 5 deals, I'm less likely to "reach" on a deal like I did on this one. 4) Leave the heavy rehab and reconstruction to others.