How much rehab is too much rehab?

[Paula Moore]

I have found a bank owned, rather tattered house sitting on 1.6 acres in a GREAT neighborhood that will need significant rehab to flip and get in shape to sell. The bank is asking 49k. A contractor estimates about 90 - 100k for a total gut rehab. All of the comps in the area range from 230 - 350k. I have a couple of friends that also do flips and they feel the rehab for this house is too extensive and therefore not worth the effort. So my question is this: how much rehab is too much?