First Deal Analysis

[Ryan Waage]

Hey everyone I have a few questions I'm hoping some experienced people can help out a noob like me with! 

I am in the process of purchasing my first home and would appreciate any guidance relating to knowing how to handle multiple-offer situations, what's a "good" worst case scenario, and if i'm blinded by rose colored glasses. 

A little background... I am a year out of college, working at a stable job, income 60k~, and live in Overland Park KS with cash reserves of 40K~. 

The kansas city market has been very hot lately and the overland park area is especially coveted. 

I am considering a SFR in a class A neighborhood. 4b/2ba, 2,400~ sq ft w/ unfinished basement. It's an REO but is in move in ready shape. It's listed at 200k, the comps in the immediate area anywhere from 290-325. 5 blocks south and you start getting into 400k territory.
I estimate reno would be 30k to bring the home up to the 320k range. I ran the numbers on the BP calculator as follows, 30K reno, 295k ARV, which said I should offer 228k to make 15k profit from a straight flip. I plan to buy, live for two years, and sell / rent. I also would be saving close to 45k over two years from no longer paying rent and tax savings.

I went in and offered 230k, 30k above list price. This home has been very hot, but the numbers make sense to me up till 235k. The bank came back and said highest and best by this monday. I was told that I am "competitive" according to my realtor. The question is, should I bid up to 235k or more? Are their any tips I can use to figure out more information? 

Based on my assessment, the worst case scenario is an 8k gain in equity from the reno at 235k offer price. Best case is 35-40k with a comp breaker. Is an 8k worst case, a bad deal or not good enough? 

Finally, the home is near the best schools in the state, top tier location access to shopping and highway, and it's personally a 2 minute drive to my work. How much of a factor is location in price bidding? 

Appreciate any and all help. 
P.S. I have looked at owner-occupying a duplex but nothing in my market makes sense atm.