Is there a general rule for submitting an offer on an REO home

[Brenda Sacchetto]

I am a new potential investor. There is a foreclosed home in an upscale neighborhood that is listed for 1,100,000.00. I haven't viewed the home yet but the agent said it was a drug house where the insides, while nice have been stripped of everything. The home is 6,000 sq. feet and currently vacant and has been since July 2013. It is in Orange county Ca. My question is what is a rule of thumb on making an offer on something like this? I'd like to offer 550,000.00 is that crazy??? Anybody know?? Help?!