REO deal

[Rich Schroeder]

I found an REO that I am interested in flipping. I will be living there while I do the flip, with a schedule of 1 year to complete. I see that for NOO flips you should try to purchase so that you're at 70% ARV all said and done. Is there a solid formula for OO flips?

details:
7 year old home
2 acres with a creek
REO on the market for one year, no offers
5br 3ba
2700sq ft
unfinished basement has egress (sp?) windows, so could add another 800sq ft, at least one bedroom and a bath (already plumbed)
asking price is $199k, needs $30k of repair conservatively.

Comps for the house come in at $250k for 5 br 3ba. I am having trouble finding comps for 6 bedroom 4 ba houses, though. I only found 4, they range from $260k-595k. There's a bigger one in town, and it's going for $2.5 million. that has 8 bedrooms, 8 baths, and 5000 sf.

I'm thinking of getting an inspection, then if everything structurally is ok with the house, making an offer of $140k and attach a $30k earnest check to let them know I'm serious. I'm also thinking the max I should pay is $160k.

Can I get some thoughts please?

thanks,
-Rich