Do you offer fair market value based on comps knowing the profit margin will be slim, or do you make them an offer that will still put money in their hands, but will give a better return on investment from my end?

The chances of your getting sued and losing more than a standard policy covers is slim to zero.

I am in my early 20s right now and still living at my parents rent free.I have the idea of moving into a duplex for the 5% down and renting out the other side however the market is very slim picking for single family homes let alone income properties. 

Maybe I am pricing these too low and that's why the margin is slim? 

The market in Pittsfield is slim to none! 

With that being said, if you would flip a house in the Nashville area right now the chances of it sitting on the market and not selling is pretty slim, depending on the area in Nashville.  

I know it will be slim pickings to find something at a reasonable price around here.

This may turn out fine, although the chances sound like they're slim to none.

I don't believe the other offer is real due to them requesting the continuation clause being removed.Am I foolish for doing this as upping the buy price still makes it a good purchase but it makes my margins very slim.

However given the slim margins ( with full leverage ) that most BP investors run on..