Finding positive cashflow

[Jeff Moulyn]

Hey everyone!

I am starting out as an analyst in Modesto CA in the next 6 months after I get my finance degree from Cal Poly. I got my real estate agent license about 8 months ago, and now that I am going to be earning decent money I am looking to get involved for the first time.

I developed a basic model to project cashflow with a few conservative estimates and I am unable to find anything even close to positive cashflow on listed online properties. (I don't yet have access to the MLS)

My model is assuming:

     -20% down payment

    -30yr fixed rate loan @ 3.77%  

-2% of the home value annually set aside for maintenance  

-insurance

-tax @1.01% property value annually

-10% vacancy allowance

-7% management fees

Am I being too conservative? my estimated rent is based upon craigslist postings of like properties and zillow zestimates. 

Every single property I looked at has a projected cashflow far in the negative, with the break even property value requiring that I offer +35% under the asking price. If it was close I would assume I just needed to find deals (ie not on zillow) but the numbers are waaay off. Is it reasonable to think I can purchase properties for 40% under ask?

I could really use some sage wisdom!

Jeff