I guess the issue is that my mortgage company didn't provide an accurate initial rate, reran the numbers yesterday and realized they were way low at this point. 

If the NOI from the Seller of $92,000 is accurate and the average cap rate for the area is 6-8% that means that the property is worth between $1,150,000 (8%) and $1,533,330 (6%).

Many FSBOs will pay commission to a buyer's agent, but that's negotiable.Your Realtor will also be able to give you fairly accurate comps for potential rental income.

Not sure where you got the 10% number but is not the accurate representation of consequences on early distribution. 

:) Assumed the condition of the duplex has recently been upgraded I think your expenses are fairly accurate.

At this time you have major negative cash flow or put more accurately you are losing a large amount of potential income.

You could talk about Phoenix or anywhere else in Arizona but I consider them vegas without the shows, the restaurants, the gambling, the tourists, the excitement, and they tack on state income tax.

If the borrower does not have a history of renting the subject property or if, in certain cases, the tax returns do not accurately reflect the ongoing income and expenses of the property, the lender may be justified in using a fully executed current lease agreement.

You need to do an accurate loan application with a lender and have them run it through Fannie Mae's automated underwriting system (called DU).

I don't think this changes your point, but worth pointing out to make the analysis more accurate.