I hope this helps you out in consideration.

The house can be converted back to sfh, but I really don't want to do that, because it's going to cash flow beautifully as a duplex.  

Are you asking if we would advise you to pay 57k for a home worth 40k which happens to cash flow a couple thousand a year?

The cash flow potential is very good according to the asking price. 

Other than that, you'll have to either pay down the mortgage and refinance again, or try to raise that rent to make the cash flow positive.

You get potential cash flow, tax shelter and appreciation.

I realize the potential cash flow opportunities (as well as possible headaches) in renting to college students.

And then I invest my money in rentals an hour from Seattle, where I can almost make decent cash flow.

It's currently rented out but isn't producing any positive cash flow, I am breaking even with it.

But one we rehabbed/flipped for +$80k net, and the other is a fantastic town home site overlooking downtown that I'll either develop myself or flip to a builder for $40k or so net (we've currently got the existing structure rented to be cash flow positive and bide us some time during the redemption period to decide).