Need Advice on what to offer for Milwaukee REO

[Darren Budahn]

I am thinking of placing an offer for a REO 2/2 duplex in Milwaukee for a buy and hold. The home has only been on the market for 3 days and all best and final offers are due on Monday.

The property is listed for $44,000 which is way below market.  I walked the property and it needs some work.  It needs: interior paint job, 2 stoves, hardwood floor refinishing, and needs repairs to the outside deck on the upper unit.  It has 2 furnaces, 2 water heaters, that are about ten years old.  The roof, while certainly not new, does not appear in bad shape to the untrained eye.  The house is in a very popular/trendy area (Riverwest for those from Milwaukee) of the city, so renting it out would not be a problem.  The property could probably get about $1,400 to $1,500 rent, so it shouldn't be a problem being cash flow positive.  Looking at some of the comps, I think the house could be worth $125k to 140k after finishing some of the cosmetic repairs.  It is assessed at $135k currently and sold in 2004 for $130k.  

My question is how much should I put in for an offer?  Should I do all cash?  Should I offer over list price? If so, how much over list price.  I'm not certain if the bank will review all offers and give people another chance.  It seems like it's a one time deal to make an offer. There were multiple people touring the house when I was there since the house is so below market value.  I am a new to this and still looking for my first deal.  I have no experience as far as what to offer in a situation like this.  I have the ability to offer all cash and still be able to do the repairs that are necessary.  I would then refinance as soon as possible.

I'm assuming my best bet would be to do all cash at least at list price without asking for any concessions and with a short window to close. I would still want to do it contingent on a home inspection as I am not experienced enough to wave that part of the offer. Any thoughts from all my fellow members of BP who have much more knowledge and experience than myself would be appreciated. FWIW, the MLS number is 1382026.