I'm a little conservative on what I want in a loan meaning I'm a sucker for a 30 year fixed. 

I think you should be a little more conservative on operating expenses!

Using a conservative rental analysis, $1,400/mo is the rental income. 

I think you're a little conservative in your reserves if it's a newly remodeled property, which is good.

I have been conservative in most assumptions.

The arv comps for this area run conservatively 205-210k.

The conservative estimate was .89%, which isn't ideal, but it's close.

Use of these indicators, of which one to consider is the history of appreciation, makes the expectation of appreciation qualify as an investment.The most experienced investors in my market use a conservative estimate of appreciation in the ROI forecasts. 

They will most likely have to bring cash to the refi but at that point with the proven income I would think they wouldn't have an issue getting a loan.Purchase for 35k (31 + my fee)Initial cash outlay say 14k (repairs + closing costs+ fee)Conventional financing 20% down loan at 40k value, they buyer would have 20% of free equity to act as DP.With conservative #'s it would cash flow $2700/year giving a cash on cash return of 18%I guess I figured that was pretty decent, or am I still missing something

Knowing this will be a tough property to sell and possibly tough for someone to get a loan on, I was very conservative.