Right Price on an REO

[John Thames]

I'm looking at putting in a bid for a FM foreclosure, owner occupied. It's currently listed at 360K but the place needs major repairs (e.g. kitchen completely gone, vanities missing, french doors gone and more) I don't think it's near worth that much in its current condition. Maybe 280K currently and 380-400K ARV.

I've been searching the threads and found some older posts that say the FM "formula" is (ARV*.70)-repair costs. Is that still good in today's market or has it changed? What should I expect from FM with today's market? Does it sill help to give them a cover letter detailing the reason for the offer price, offer fast closing and short inspection dates with larger EMD, etc?