REO offer estimate

[Alex Steward]

Hi all...I am a newbie so sorry if someone feel that this kind of questions has been answered before:
I have a REO I am looking at right now...it is in a prime area and under normal circumstances the real price of the house would be around 320,000 dollars.

But the house needs significant work and currently has no CO. It needs bathrooms etc. It will need atleast 100,000.00 dollars worth work.

Amazing thing is this house is listed for REO with $320,000 which does not make sense. I am interested in the property and think I can work on it with me and my buddy to fix it with 6 months and restore it with sum of 75,000.00 (without my labor costs but my buddy labor costs included).

Question:
How much should I offer? Obviously I would like to make maximum out of the deal but...since this is my first offer I don't know how low can and should go? By the way the REO has been on market for just over a month.