@Nick Rice I think all chris was saying is that the market as a whole right now is pretty hot, and there are bidding wars going on, "almost" everywhere, and when a buyer comes in with a FHA loan nowadays, usually there is a couple other bidders already bidding on the same property with 20%, 25% down, maybe even full cash, so the 3.5% down offer to a seller is a bit of a last option.  

I plan to live in the property for the time being with roommates and then eventually will turn it into a rental so I want the numbers to work on it for a rental.I think the house is below market value here, things are hot so I think $120,000- $130,000 or more might be needed as a bid to get the place.  

I went through the process of demolition, getting plans drawn up, getting contractor bids, getting permits, dealing with subcontractors and finally having the work inspected and now I am just waiting on the final inspections to come through to I can put the place up for rent.

They will often tell you to bid higher than what you had originally thought to try and "win" a bid (otherwise they make no money).

Take advantage of this time to get bids from contractors and firm up your rehab estimates.

Sadly, with the plethora of new note investors on the scene, they are bidding those up to 60 cents on the dollar and guaranteeing they will lose money if they have to FC and try to sell it, only a rehabber will buy it for what they paid, or less.....

Get bids from contractors that are interested in what you are trying to do.  

If they claim an ARV price that requires x dollars, have them provide a written bid from a known contractor.

I take care of the maintenance and make-ready as needed with full disclosure (photos, receipts and contractor bids), so no problem there. 

@Mike Cumbie I put in a bid on a property in NJ so I'm not sure if that program would be available to me.