How much more should I offer?

[Jerod Smith]

so I found this great foreclosure for my first rehab. It's a 3/2 built in 81' 1780sf on 3.5 acres just on the edge of town. Here's the things to rehab:

• Engineering report says 22 piers. 
• Kitchen and both bathrooms gutted. 
• Floors throughout. 
• Painting inside and out. 
• Some drywall patchwork. (Popcorn ceilings removed). 
• Landscaping, tree trimming. (Lots of trees on this). 
• New Hvac. 

I've roughly figured on $40k for the rehab cost. 

Comps pulled myself range from $125k-$140k up to 2 acres. No comps for a 3.5 acre. I offered $55k over the weekend. Realtor said they received another offer over the weekend as well and wants me to counter offer. 

Opinions on the property and how much to offer?  I'm self contracting. Remember first rehab, so learning curve will be applied. Thanks for the input!

[Fred Heller]

The general rule of thumb is that you start at 75% of ARV and then subtract your estimated repair costs. Many will argue it should be closer to 65% to 70% of ARV.

So using the 75% of ARV rule, if your expected ARV is $140,000, the most you should offer is $65,000. If you wanted to use 65% of ARV, well you've already blown that out of the water with your $55K offer.

Personally I don't like to deal with foreclosures when there's a bidding/auction thing going on. I've gotten roped into a few of those things and there's always some idiot who is willing to pay way more than any sane person would pay.