To the OP, these are the main reasons that you need to look out, nobody will give you an accurate estimate on your rehab costs for free, if the contractor that you invite knows a lot about fire damage repair -- which they usually does, they won't hesitate stealing your deal.

I wouldn't worry too much about others stealing your deal - chances are it would be too much effort for people, unless they are in your backyard.

I realize that an investor may thinkthey got a steal of a deal, buying under market value, that is usually not the case, but if you did, if you can show that, it may help, like buying from a private party where the property was no advertised, that may justify more with some lenders.

More than likely I would only get 2/2 rent out this thing.The property would need about 30K Rehab to be rentable.Factoring all of that, this property to me isn't worth it unless you can steal it at 30K or less.Just to answer a few of the comments earlier:@David Jaques I wouldn't qualify for conventional credit due to LTV and DTI guidelines.

There is a distinct area of our city the has a greater number of house fires and interestingly the police department crime map overlay indicating high crime rates is almost identical.

Kenneth, your plan is identical to mine.

I had almost an identical issue.  

The appraisal came out about 15% below what it should have and the appraiser did not even count the sale of an almost identical property 3 doors down that was sold 2 weeks prior.

In my financial state it would have to be a steal for me to follow through, I am honestly more interested in just learning how to analyze deals and get experience. 

People moving from the bay area see 700-900k homes as a steal of a deal in Seattle.