How much should I offer on $199,500 home, if I am asking for the saler to pay all pre pays?

Offer what you think they'd accept. Start low offer them $150,000, if they find it insulting or counter offer raise your price. Let's say they accepted your $150,000 offer most mortgages allow a 6% seller's concession, so your total mortgage could be $159,000 if you were putting no money out of pocket and you'd still have something left over. You can get a good faith estimate from your mortgage company and figure out exactly how much you need to close.

I forgot to mention. Get a market analysis done and make sure the property is really worth the $199,500 in the first place. If it is, stick with the lowball offer strategy written above. Remember everything is negotiable.

Also if you're getting your real estate license which you mentioned in your other post, you might want to wait until you get your license so you can get the commission on your purchase and be able to run a fair market analysis (fair meaning you configure it so you won't end up with a higher end price market analysis).