Underwriting multifamily properties am I being too conservative?

[Philip Hernandez]

Hi all, I'm in the middle of negotiations/underwriting for a 12 unit multifamily property in Ohio.  Property is currently bringing in $8400 a month.  We are looking at value add that would bring the property up to $10,500 a month and higher over the next 5 years.  In our underwriting we've ended up calculating 58% for operating expenses, which hasn't left us much after the debt service for our potential purchase price of 650k.  My question is, if I am being too aggressively conservative in my underwriting, and potential making a good deal look untenable...for other multifamily investors in midwest markets, how high do your operating expenses and up being.  It's been easier for me to calculate on single family /duplexes that I've purchased, and I'm nearly in analysis paralysis land with this one.