BiggerPockets

Looks good to me for either approach. You're all in at $70K vs. an ARV of $125K. Even with the concessions often required today, that's looks like it should net you $20K or a little more. Need to be sure you can actually sell it quickly at $125K.

Should work OK for a rental, too. Doing the 100% financing calculation, your payment should be around $500/month. $1200 in rent gives you $600 in expenses and $600 in NOI for a $100 cash flow.

Living in it two years and then flipping is a great strategy, if you can put up with it. That give you the ability to avoid taxes on the entire gain. If its liveable as-is, you can take your time with the repairs, do some of it yourself and use it as a learning experience.

Tyler-

The bank can only say "no". If they do increase your offer.

If the house has been on the market that long at that price, which seems like a good buy as a rental or fix and flip (based on the info provided) Are you sure you're not missing something? It seems like it should been snagged at that price. Where did you get your comps?

Do your inspection after they accept your offer. You don't want to spend money on the property until you know you can buy it. You typically have 10 days to do this and if you find something very wrong you can walk away. Earnest check will held by the title company. It can be submitted with the offer, but I wait till the offer is accepted.

I always include an inspection and other clauses, and listing agents for REOs always "remind" me that the property is being sold as-is. . . . I simply ask them to send my offer as-is, and to let the bank counter.

Put down the least amount of EMD as possible. I'm cheap: I rarely use an EMD greater than $100 for residential properties. By the way, never ask the listing agent what to put down (many of them are programmed to say somewhere between 1% and 5%--which is a down-payment as far as I'm concerned); tell them what you're going to put down.