Does This Deal Make Sense (Purchasing First Duplex)

[Kristopher Sharpe]

Hello BP,

I am under contract at the moment for a duplex. I am getting this deal off market. We just got done with appraisal and supposed to close on Friday of this week, however the appraisal kind of surprised me.

I have spoken with various property managers and they have all told me that I should be able to get ~1400$/mo per side of this duplex, however when the appraisal came back, the estimated fair market rent is 1200$/mo per side. The current owner has had the same tenants in there for 6 years and never increased rent so they are below market rent. 

I am purchasing this from a real estate agent, she was initially asking $400,000 I ran my numbers to be able to make 10% cash on cash ROI and said that was my top dollar to achieve this was 370k.

Here is my breakdown for my initial. I will be managing this property myself so have 0% for the property manager rate. 

The duplex appraised at 380k so that is good, however with the rent being 1200$/side here is the breakdown:

Do appraisal values typically come in higher/lower than reality, or are they usually pretty spot on? 

With the appraised value/rent would it make sense for me to just walk from the deal and lose my earnest money & inspection/appraisal costs? Or is it better to go with the estimated rent from a property managers estimation?

Any suggestions/advice would be greatly appreciated.