It's not a 2%er, but does it work otherwise?

[Bob Oliver]

Here is what I have. 1200SF, 3BR, 1BA brick ranch on 1.3Ac in the Williamsburg, VA area. it sold in 04 for $105k and was a rental then for $1250/mo. Owner took off the market, gutted, new wire, copper, insul, flooring and rock and moved in for 3-4 yrs. for sale now at asking of $250k. Property also has 2 out-units cottages needing rehab that have kitchen and baths. i estimate $10k to rehab, $5k each, to make occupy-able.
By the numbers:
Rents: $2300: House $1400, Cottages: $450 ea
vacancy at near 0.0% because it is another student house that leases 6 months before start.
loan: 25% dwn conventional, 6%
3% closing
$10k improvements
I come up with about a $160,600 1st D/T
Taxes are $0.77/100
insurance about $300/yr.
I can see offering a max of $195k.
By the 50% rule I get about $185 positive monthly.
does anyone else see this as a potential deal? Obviously, by the 2% rule it is a walk-away, but isn't that better suited to $1000 GOI or less?
My analysis software has this deal at about a 15% C/C. Are there other finance suggestions?