The deal I was engaged in was very good from a cash flow perspective ($400/month with 11-15% cash on cash return depending on what the final numbers would have been), however the seller terminated the contract after I offered the appraised value as a counter offer. 

It's true.Most seasoned investors calculate what it should really be worth after deducting rehab costs, deduct a little more and then tell the seller, "This is the only price that makes sense for me. " They'll either say, yes, no or make a counter-offer.  

I've purchased a few notes from FCI Exchange and although they charge a brokerage fee, they do provide escrow and the ability for you to review the collateral and counteroffer the seller in a formalized way.

I have increased my price once responding to Seller's counter offer.

You will either get yes or no or counter offers from those partners and then you can decide if you want to move forward with that partner or not. 

Just received an email from HUD saying they are putting a counter offer process in place for 80% (only offers over or at 80% will be considered).I am fairly new to the HUD wholesaling process, so I have a question.  

When you get the counter offer, use that info to your advantage knowing they have no other offers.

Well, they finally counter offered....they came back at $350,000. ridiculous.

We are then told that the 1st Offer People Declined the Banks Counteroffer, and that the Seller would like to Counter our Offer.We receive the Counter. 

The LTV and credit scores are fine as the property is worth 2.1M but I keep getting denied or counter-offered.