It would depend on what your market conditions are. IF your ARV is correct and you’re in a declining market, then I would offer $95K. If you are in an area where houses are still appreciating, then I might offer as much as $131,000. This assumes that you plan to rehab and sell. You have not given enough info for anything else.
first off, you should know what your state’s foreclosures laws are as many states have statutes in place to protect property owners who are in foreclosure.
this could dictate what is a reasonable offer
improperly structured preforclosures sales can land you in court when the ex-home owner decided that you took advantage of him. granted this does not happen in every case, but you should be aware of the pitfalls of this type of transaction