I am putting in a letter of intent for the 8 room apartment.This is my first offer on a commercial property, since I have only done SFH so I could be missing something in my analysis.Since I don't have a lot for the down payment, I was planning to offer $20,000 down with a 30 year loan amortization at 6% interest.

I am inclined to offer him $35K for the following reasons:1) If I have to wholesale it, I have been advised to offer an amount less than 50% of ARV (which means I must offer less than $40K)2) My intention is to make a $5K wholesaling fee (which takes it down to my intended offer price, which also leaves him with $5K after his loan is paid off.Is this a good strategy?

Awesome testimony Andrew Davis The house is big and for that price, good score and I learnt something from your story that I will take into consideration when I do a deal...that there are times to offer higher than asking price to seal a deal if there is a lot of competition so thank you so much for sharing and all the best with the project as a whole!

Don't be afraid to offer less on investment properties

dont go into competition with 800 other similar units unless you are going to offer something different or unique.  

I was bummed but thought I would go ahead and sign up on auction.com and bid only to the amount I originally was going to offer.

Thank you for the nice welcome I look forward to meeting great folks and using all the resource's Bigger Pockets has to offer. 

I wasn't saying the price was right, I'm trying to figure out what to offer in this situation. 

Look around at other deals and see what your market has to offer, especially since, as you said, this property is coming in at a premium price for the area which will make your exit more tricky.

If for some reason you need to lower below 5%....you still need to offer the buyers agent at least 2.5% and take the lowered part from your self.