First Purchase: A distressed REO???

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Hello,

First poster here. I have been studying up on real estate investing for some time now, and I finally am getting serious about taking the plunge. I live in northern Virginia and am interested in purchasing a REO. I am about to go through the process of getting bank pre-approval, bringing in a contractor to give me some estimates (only plan on using contractors for the big jobs), and planning out the finances to ensure I can make it all work.

My biggest question is regarding how I should go about making my initial offer to the bank. They are asking in the mid-200s for a place that, if fixed up, could go for almost 300k. Probably would take 30-40k to really fix it up. It has been a REO for nearly 6 months, and my understanding from the listing agent is that the bank is flexible on price. So how low should I go? I know that it is not a straightforward answer, but any advice would be much appreciated.

Thanks in advance. This looks like a great forum, I look forward to learning from you all.

Casey