Fannie Mae forclosure, bargaining room?

[Phillip Rhegness]

There is a foreclosure I took a look at and was very pleased with what I saw. Musty, spider webs, a couple of dead roaches, and a moldy finished basement with damp carpet. Yes! $$$ Profits await!

But then the listing agent told me it was a Fannie Mae listing. Doh! What's the chances of me squeezing a good price for this house knowing Fannie Mae is only looking at the property on paper?

Here's the basics on the house:

--4000 SQFT (including 1000 SQFT finished basement
--6yr old central unit and unknown age second unit
--excellent foundation with no to very minimal settling
--split level with large bedrooms and large bathrooms
--1.5 acres lot in a good neighborhood with a few million dollar homes a couple of streets over
--nice but neglected landscaping
--built in late '70s

Fannie Mae wants $179k but it needs everything on the inside. Everything.
--All carpet is nasty and stinks from being closed up for over a year with a wet basement
--ugly paneling in some rooms, vinyl floors are ripped, and most likely the ancient kitchen appliance do not work

The wet basement appears to be less scary than it first looks. A brand new water heater is sitting down there and the basement has a little bit of a hump in the middle (very slight) so water can move two different directions. I am thinking the water heater busted (while going through the foreclosure process) and was then replaced. The carpeting down there held the water since the place is closed up and the only areas that dried are the ones near the windows so the sun light could help out. The back side is STILL wet. Mold is on the trim work and sheetrock but not on the floor joist for the main floor. There is a drop ceiling and the wood behind the ceiling looks perfect.

I think the house could be a $240k home even in this slow, slow market if fixed up. Maybe $260k when things begin to swing back around. So how do I get Fannie Mae to come off that price more so I can sink about $50-60k into it (for materials. All labor will be me) and still make a very nice profit?

Anyone successful in convincing Fannie Mae to take a big drop in asking price?