Is newbie's deal analysis too conservative?

[Jean T.]

I'm looking at a SF property. I want to get the community's thoughts on the analysis of this deal. Am I being too conservative, or is this just a bad deal?

Asking - $110K
ARV - $125K

Potential rent - ~$1300/month
Required cash flow - $200/month

Monthly expenses:
- Vacancy - $110 (1 month/year)
- Taxes - $250
- Insurance - $90
- Management - $130 (10% of rent)
- Maintenance - $130 (10% of rent)

Rehab - ~ $5K

Purchase costs - ~$9.5K (Closing costs, Finance costs, Holding costs, Management setup, Appraisal, Risk insurance, Inspection, Misc.)

Maximum purchase price = Rent - Required cash flow - Expenses - Rehab - Purchase costs = ~44K (assuming 7% interest)

With asking price being ~$110K, I don't see $44K being accepted as a top offer. Even if I use the 50% rule, I'm still at around $50K or so. Am I being too conservative here by including too many costs or are some costs too high? Or is this just not a good deal to even pursue?

Thanks a lot.