In the middle of a property purchase--should I back out?

[Ryan Thomas]

Full disclosure: I am very, very new to all this. I follow the basic rules: buy 1%+ properties, have significant cash reserves, etc. etc. So far I have 2 rentals that have been doing great and are absolute cash cows.

Property values are insanely low in my city, but the rental market is killer due to having 5 colleges within 10 miles and a rapidly growing city. So the property I'm looking at is a 2 bedroom, newer construction home (2011) listed at 64900 which is considerably under the tax assessment. Offered full price + $5300 in repair credits (the current tenants smoke, so I'm thinking repaint + refloor + install new HVAC, which is unrelated to the smoking) and the seller will pay $1300 of the closing cost. So basically full price, but I get $6600 in cash back essentially.

I would most likely be able to get $700 in rent per month, but that was as of the market pre-panic. And obviously, home maintenance would be next to nothing for the foreseeable future.

Considering the current state of affairs, should I back out? I haven't signed anything yet. Thanks for any advice you can offer.