Is an average deal okay to start?

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Hi, I'm in California and the property is located in Georgia. (My mom lives in Georgia so I have someone that help out if need be. I plan on using a property manager.

Here's the scenario. The deal I have is an average deal. Not a great one unless I bid 360k...but I doubt the buyer will accept it...

This is my first REI investment and it's out of state so I wanted a class A or B property which is why the deal is only average....

The property is a Quadplex. 2 units 2/1 and the other two are 3 1/1. Tenants are signed till 2008. Good area with growing population.

I'm assuming 10% vacancy rate, 6% property management. The cap rate I think is 6.5% and Cash on Cash is only 3%. New roof and gutter guard in 2006. Newly painted in 2006.

Purchase Price $400,000.00
Down payment $80,000.00
Mortgage at 6%.
$1918.00 Monthly debt payment
Gross Rental income
$37,020.00
10% vacancy ($3,702.00)
Tenants pay utilities
Tax $3600
Insurance $1500
I'm assuming 6% property management. I figure my cash flow would be $250 per month.

What do you think I should offer to make this a more attractive deal?
I mean I know he's asking for 400k but what would be a reasonable counter if at all? Cover all my closing costs? Paying more points?

Should I go ahead? Or wait?

Paralysis by analysis or just pass for now?

Please help.

Thanks