BIG Remodel on a Foreclosure-any thoughts?

[Julia Rohleder]

We have been looking for a couple of years for a house in an expensive area. Many of the houses were built in the 50's, have had DIY low end remodels, are 2500-3000 sq ft, and are around $350k. Most of the homes need electrical redone. My #1 desire is a good lot. We would want to live in this house for at least 5 years. The investment aspect that's most important is not to spend too much, so we can retire, not to flip it. There's a house in foreclosure with a great lot in a perfect location for us. It would need to be lifted, because the ceiling in the basement is too low. A garage space would need to be added, because it's only a one car garage. We'd need the main level reworked and the kitchen redone. I would love to add a 2nd story with 2 bedrooms and a bathroom. The house is listed at $262000, but I can't imagine they'll get an offer at that price, because the basement is really terrible. The MLS info isn't accurate, as far as it including a basement bathroom and a finished basement. We'd offer $140000. I could get estimates to back up our offer. There are many lots priced above that, and it seems it would be cheaper to have a foundation and utilities already run to the lot. We would used an architect and licensed contractors to do the work. Any thoughts on the offer price or the headaches involved in embarking on this type of project? Any thoughts on what the improvements would cost?