Real Example of the 50% rule; need clarification

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Hello! I'm new here and I'm wondering if I am interpreting this right...I'm running the numbers and I am somewhat baffled how I can't find any "good deals." 

The 50% rule states that 50% of your income will be spent on expenses (not including mortgage). So I decided to run my own example. I used Zillow.com to compare some single-family homes and find homes for sale and rents in the area to get a general idea of the market I'm looking at.

I found a 3 bedroom, 2.5 bathroom home selling for $290,000 on Zillow.com. The average rent in this area, according to rentometer.com, is $1,690. Crosschecking with Zillow I found this to be fairly accurate (I was seeing rents between $1,400 and $1,800.)

Assuming I were to invest in this property, I would rent it out for $1,690. Now the 50% rule states half of my income will be going towards expenses; therefore, expenses will be $845. Note that this does not include mortgage yet. My net income here is $845.

My estimated mortgage payment, assuming a 20% down payment and with taxes, insurance, etc. comes out to be $1,464.

The cash flow here is quite negative: $845 minus $1,464 comes out to be a negative cash flow of $619.00 per month! Without accounting for expenses at all (rental income - mortgage payment) , my cash flow would be $226 per month ($1,690-$1,464).

So to conclude I have a few questions and notes...

• I realized on a positive note if you can find a property with the 50% rule and you get a cash flow positive after that conservative estimate of expenses...you may have found a great deal. Though I would imagine you gotta really inspect the property. Perhaps it is cheap for a reason.
• "What gives" with using the 50% rule. I have applied this rule for about 20 other examples and I haven't ran into a single positive cash flow. (I came close once with a -$100 but that was with a foreclosed home).
• What am I not taking into consideration?