Will be interesting to see it materialize. 

I am capable of doing the labor required to rehab this unit, but I'm more concerned about the quality of the material going into the renovation. 

Your suggesting to put up insulation and then some type of subfloor material on the ceiling of the basement? 

This is the municipal code that the tenant quoted that allows them to withhold rent:5-12-110(f)(4)“Withhold from the monthly rent an amount that reasonably reflects the reduced value of the premises due to the material noncompliance or failure if the landlord fails to correct the condition within 24 hours after being notified by the tenant; provided, however, that no rent shall be withheld if the failure is due to the inability of the utility provider to provide service”They ended up withholding 2 days of rent and would not reply to the previous owner’s correspondence afterwards.

Generating actionable steps is intuitive to some and less so to others.Hope this alternative perspective is helpful.

Can someone point me to material to read so we would have an idea what we'd be getting into... pros and cons? 

@Nigel GiovanniHello Nigel, I'm connected to an alternative lending group that specializes in fix and flip financing.

Alternatively, check the network section for Investors to whole sale to. 

If the place is still fire damaged, just make sure your offer covers the $20G or so of additional costs it will take to remove all the contaminated building materials to a certified location rather than your local dump.If it has already been repaired, then there are different solutions.  

Rents were reduced in the last two months quite materially, and old tenants were given a month's rent.