what are the key metrics when consideirng an apartment complex deal?

[Brent Rogers]

My college town investor specialist agent is trying to convince me to move on a 12 unit deal near a major college university campus.  In fact it is prime location where kids can walk to class and restaurants.  It is 100% occupied and pre-leased for next year with some increases in rent.  She feels the units are somewhat under rented at current rates.  At the current proposed price the complex struggle to break even on a cash flow basis at best putting 20% down with a 20 year mortgage and 35% expense ratio.  This would require a 150k investment so the cash on cash return is pitiful in my mind.  Is this as awful as it seems to me?  I am new but interested in apartment complex investing but I would think it's all about cash flow that increases the longer you hold?  

In terms of the "one 1% rule" is anything below that something to walk away from without any further consideration?