Estimating expenses too conservatively?

[Brad Cogswell]

Hey all,

Wanted to get your opinion here. I'm investing in California, and have been looking at a number of duplexes. After gross rent, I'm deducting an immediate 30% off the top for variable expenses - Vacancy at 5%, Repairs at 5%, Capex at 10%, and Property Management at 10%. Am I being too conservative where I will make it too difficult to find a deal at all based on those assumptions?

In the example below, I'm left with $323 in monthly cash flow with a cap rate of 7.7% and CoC return of 9.1%, which doesn't seem high enough for me to pull the trigger. Below is the pro-forma to take a look. Thanks!