Thoughts on buying a flood effected home near Ipswich?

Hello everyone,

Just wanted to throw out an open discussion to anyone that had an opinion on purchasing a flood damaged home near to the Ipswich area… My business partner and I have thought of a range of obstacles or challenges to overcome, however before we discard the idea and look somewhere else it would be interesting to see what all the smart investors had to say on the topic…

Purchase price approx. $120k, structurally sound and already stripped back ready for re-wiring and plastering;
$30-$40k raw materials (labour is free with a friend);
6-8 month project to hold and either sell or rent depending on the outcome and the market;

Have not yet approached financial institutions to see how much of an importance they place on factoring in the flood effected status when it comes to valuations, or how much extra insurance is to cover a home of this nature… Demographics for Ipswich look ok and are steadily growing, (or returning to normal post flood crisis) with the majority of the population consisting of families with three children. Unemployment is slightly up and income a little less than the national average, however optimistic thinkinking may put us in more of a good renters market as opposed to a buyers market. Good infrastructure upgrades heading in and out of Brisbane CBD.

We have a list of other things to check up on, so like I said anyone that could be bothered to type out a few lines on either their past/present experience or would like to make a general comment, I would be most appreciative.

Thank you in advance,

Kieran.