We got a call back that night with a counteroffer of $240,000. 

List price was $116,000 or so, offered $95,000, counter offer of $110,000 and we agreed to that price.

You find a motivated seller, run the numbers to find out what the max purchase price is you can pay if it's a good deal, make your initial offer(there may be counter offers) but don't agree to anything over your max purchase price, get it under contract, flip it to someone else before you are scheduled to close for an amount higher than what you are paying for it, and keep the spread.

We discussed the terms, made some counteroffers, and ultimately reached a deal that worked for both parties.

We discussed the terms, made some counteroffers, and ultimately reached a deal that worked for both parties.

You can probably reference former offers put together by agents or counter offers as a starting off point.

If we say "no rent reduction," are they likely to come back with a counter-offer or simply close the store altogether?  

I declined their counter offer realizing that for a first time investment it might not be the greatest thing I could do.

If the unit has not been listed for too long, you might want to wait at least a few more days for more inquiries/applications.That said, I'd consider the following:- Counteroffer at $1295 or $1279 so that you are finding some kind of middle ground- Once a monthly rental amount is agreed upon, set the expectation that rents will increase 2.5-3% each year.

Bank's addendum states "Buyer is to deposit earnest money in the amount of $1,000.00 in listing agent’s escrow account or with Seller’s closing agent upon acceptance of this Counter Offer.