Selling might be tough, building and renting seems like a fair idea, you need nice insulation though.

There is a lot of competition in Wholesaling and it is pretty tough.  

Should I go all out and make it like new again with high quality expensive material or should I go less expensive but still like new?

Once someone falls into significant debt, it is tough to get out of it.  

My thought was that since they are not selling and certain categories and areas are tough even in hot markets this may be an opportunity to exploit.

Managing across country for a seasoned investor might work, but my personal opinion is that it would be tough.

@Anthony Russellunfortunately the majority of the tax calcs out there will produce inaccurate results for two reasons: (1) calculating your tax liability can be tough to do, especially if you are a real estate investors or a business owner as you will not see the same net income month over month and (2) the tax calcs that do work aren't tailored to your specific situation.

They may then be able to cut you a second check for any recoverable depreciation that you can still collect.Also, they are not depreciating the repairs, the depreciation is based off of the usable life that was left in the damaged materials at the time of the loss.

It is helpful to keep your personal number off of your marketing material.  

I suggest the books and  free materials  on the NOLO Press website.