There are two ways to do it.If you are looking to buy as a primary residence, you base the value on the comps with any adjustments for condition and amenities.If you are buying to flip, you use the flip formula: ARV - profit margin - rehab costs - closing costs - finance carrying costs = maximum possible offer.If a seller is holding out for price, a low offer without contingencies doesn't mean very much to them.

If seller does not want to accept $20K less, walk away.

If not I m going to see what their counter offer is, and see if they would be receptive to seller financing for 5 years, and I will just be aggressive and pay it off by then.

Luckily the seller was a friend of the family and it was no problem getting contract extensions. 

Unless the seller was intentionally hiding a material defect that he was aware of at the time I don't think you'll have much recourse as you likely had an opportunity to perform due diligence inspections prior to the sale.

Convinced the seller to do a contract for deed with a low down payment and a year and a half later I refinanced so that my name is on the property.

If the Seller agrees to reduce the price to $210k, this will be a short sale and the bank may have a say or two about it. 

I've been looking for a ROI for cashflow rentals and what would make a great offer to the seller, as well as add my assignment fee.

I have a motivated seller, who has verbally agreed to sell me her house at 55k.

We signed a contract with the seller's on 1/7/18 for a three family house.