Purchasing a bank owned rehab project for first time.. What traps do I need to avoid?

[Jean-Thierry Aleman]

Hey BP family,

I am currently going after a bank owned property with significant neglect and damage. It has an old ugly pool.  The roof needs replacement, The wood siding outside the house is destroyed. The list goes on and on..... 

Its your typical FULL GUT rehab. They are asking $285k. ARV is about $500k. Needs approximately $110k in rehab. We are putting an offer in 30k below asking.

There is plenty of meat on the bone from my perspective. I have never bought an REO before. Thoughts? What should I know/avoid? Specifically in relation to this being bank owned. Should I even bother trying to go below asking and risk losing the deal altogether?

Thank you

--JT