Without accounting for management fees (I have not yet decided if I will try to self manage), and with planning to raise rents to typical market of $825 for each of the smaller units, and $1200 for the larger unit, does this seem like a worthy first investment? 

One of the biggest factors in successful flips is building a strong team: contractors, agents, lenders, and property managers. 

Do you think that is fair - to be forced to pay for your manager's mistake?

I have grown insanely skeptical of BP over the last 5 years, yet somehow I am trying the lead generation for both property management and now as a featured agent.

I estimated capex at 10% which I think is low considering the deferred maintenance, 10% property management, 8 percent vacancy.

Unfortunately, not many around like that...The appraisal is about $150-$200 higher than standard cost because they likely went through an appraisal management company ("AMC") to get the appraisal ordered/assigned.

that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

we are still assessing the rentals we manage but overall are just finding a few minor issues so far. 

I am planning to self manage as well and since there aren't many managers in my area I will likely employ a similar strategy once I decide to outsource the management.

You may get EXTREMELY lucky and find one for 15% (if they get approval from management), but you will not find one for 5%.