Just because a car gets flood, it does not mean that the engine is ruined. There is a possibility that the engine did get ruined if the engine was running, and the driver drowned it, and hydro locked it.
If the car was mine, I would remove the spark plugs, dump the important fluids (motor oil, transmission fluid, power steering fluid), remove the oil filer, and use compressed air to blow out the cylinders.
Then refill the fluids, and charge and/or replace the battery, and try spinning the engine with the spark plugs out, and the coil pack disconnected.
If the engine spins okay, then you can reconnect the oil pack, reinstall the spark plugs, and try to start the engine. If the engine does not start then pull one sparkplug wire, and connect either a spare, known good sparkplug, and test for spark. If there spark, then use a "NOID" light on a fuel injector to see if the fuel injectors are working (meaning the fuel injectors are getting power to open and fire.
For $500, it would be worth buying the car to try to repair or part-out if fixing is going to be too much trouble. Especially if the car has an AX4N transmission.
The Gen.III cars weigh about 200 pounds more than the Gen.IIs, but they are much stiffer (chassis wise), and handle much better than the Gen.I and Gen.II models.
guys......................that was 2003. the engine is sitting dissassembled in my back yard, it had a bent connecting rod on cylinder number 1, and the rest of the car did get parted......4 years ago.