I have room to reduce the cash out and lower the build cost slightly I will rerun the numbers to see. 

The HOA is 127.50 a month (lower than most HOA's in this area) and it covers Exterior Mnt of Unit; Roof Repair; Roof Replacement; Blanket Ins Policy; Garbage Collection; Common Area Maint; Street Maint.

The trade off for that is twofold; a static interest rate for the next thirty years, vs a slightly lower, but variable interest rate on a HELOC that could be 15% in five years, which would likely bankrupt most investors. 

My agent is advising me to perhaps give them close to asking price or more and if it does not appraise we can renegotiate for a lower price later.  

Go home and call all of your credit cars and ask them to lower your interest rate and raise your credit limit".

On the lower end (duplex and triplex) sales price is based on sales comps.  

You have lower interest rate.

@Jose Castillo I think negotiating with the seller is an option to offer him a lower amount on the property and then he pays off the HOA as a part of the sales transaction.

and if there is a tax loss, would it lower my tax on a 1040?

It will allow you to negotiate better terms (essentially lower %) with them, so you will be able to reduce the property mgmt fee expense indirectly.