When to fix and when to knock down?

[Steve B.]

I looked at a house today that seemed to be a pretty normal brick bungalow from the outside, but the inside was a total disaster.  it was about 100 years old but nothing on the interior was salvageable.   Most of the walls were crumbling, the floors were warped and broken.   Both floor and ceiling joists were exposed and barely holding on.   At a minimum this would be a total gut rehab.   But where should I draw the line on this.   At some point it is better to knock it down and start over, right?