First time making an offer on an REO any suggestions

[Joey Smajd]

Here's my first REO Deal:

I live in West Central Georgia on the border of Alabama attempting to make my first offer on a 2 story in a decent neighborhood that has only been on the market for 2 weeks:

Built 1967
4 bed/2.5 bath
3370 sqft
list price is $110k
Needs $50k-$70k in repairs
Fixed cost projected $20k
Projected Profits $20k-$40K

Plan is to close on the property for hopefully under $110k

Renovate the property within 4 months

Move in by December 2013 and live in it for 1 year

List it for sale in Fall 2014 for around $230k

Comps have it coming in around $225k but think will be hard to sell in our current market and would be better to wait.

I have a home that is free and clear and plan to rent it out to offset the mortgage/ins/tax while living in new home.

Other info: REO's in our area seem to be selling quickly within 1-3 weeks of first appearance on MLS

I will be financing the deal ideally 96.5% of sale price

So should I offer full listing Price Initially based on these numbers?

Or should I gamble and go 10-15% below and risk losing it?

How much earnest $ should I put down is $1k enough I've heard $5k is better?

Submitting my offer in the morning please any guidance or tips would be greatly appreciated!!!