The 1 or 2% rule is a screening tool only to help you decide if a property is worth a further look or not. You need to know what is reasonable in your area and not get caught up in a number. In Houston, 1% is about as good as you can hope to do in most cases, unless you are buying in sub par areas, and generally you need 20% down to achieve this.
This deal looks weak to me. After you factor in HOA dues (if any), property management, vacancy, maintenance and capex, I think you may be lucky to net $20/month in cash flow. You don't say how much you are putting down, but increasing that amount up to 20% if you haven't already and lengthening the term to 30 years could help improve the cash flow. Most investors I work with like to see between 6-10% coc for their long-term holds.
Also, please be aware that it will take longer to rent a one bath than a two, so pay attention to that vacancy calculation. Good luck!
