Fannie Mae property offer?

[Steve Volk]

I put an offer in on a Fannie Mae owned property this week and it was rejected. The situation is that the house is in a section of town where I would consider it a C class area. The listing price is $14,900 but the house needs a new roof, total interior renovation, a new sewer main (so it would comply with our new local regulations) and extensive plumbing repair due to thieves stealing the copper pipes. I figured the total repairs would amount to $13-15k with much of the work done by me. In the end the house would have an ARV of $22-25k with the local comps taken into consideration.

My bid was $5,000 cash which I thought was, and still, is an honest price for this property considering all of the repairs that are needed. I may be willing to raise the offer a few $1000 but nothing more than that.

Am I being unrealistic with this offer or should I just walk away and let this house become just another blighted, uninhabited property that my town has become too accustomed to?