I suggest going in lower than $27K and putting it under contract then wholesale it to another investor/rehabber to deal with the hassles. Check out the articles section on wholesaling. There are some great resent ones. That way, you can get a quick payday with no hassles!
I found a rehab from a REO that is in pretty bad shape. It’s about 1200 sq ft and on a block crawl space foundation. The termites have gotten the best of the floor joists and plywood covering in half of the house. There are also a couple of leaks in the roof. The 2 car garage is about to fall down. The REO is getting in the $27K price range for the property. He started at $39K. The lot is appraised at $25K. This didn’t seem like a hard money approach since I guessed the repairs would be around $35000. If the house were in great condition, it would appraise for $65K.
You don’t give us a clue as to your skills, experience, abilities, etc. So it is hard to advise you.
My view: if you are not a contractor and have worked on a lot of properties like this, forget it.
Look at the numbers: Fix up + asking price =/> market value. Now, you’re saying well, “it’s less.” Nope. What about closing costs? What about holding costs while you fix it up? What about 15% contingency for cost overruns?
Besides, you don’t know how to do a rehab, right?
Forget it. Why would you even consider this turkey?