The profit will be too slim for my own comfort level, and there are better deals to be found! 

These costs an eat up a slim margin deal.

. $100k property commands $1000/month rents)Assuming you are wanting to make your profits from cashflow, 850 is too slim.

I was thinking more along the lines as a fix and flip to a first time homebuyer but it sounds like that market of buyers maybe slim.   

The chance of your worst case scenarios is very very slim.

If that's the property you really desire for your portfolio, then slim it down in a good, conservative model and see what it works out to be.

Having said that, the majority of deals I lend on came from MLS originally, but I agree, if you are looking around Wilmington, the pickings are slim right now.

If purchase plus rehab is 80% of ARV, profit will be slim and best and can easily turn into a loss.That rule of thumb assumes you're using hard money at the rates you mention.

I think risk goes up when you're operating on such slim margins too.

When people discuss being over leveraged, often they are talking about days of the past, when you could put $0 down or close to it, on investment properties.Today you will normally have at least 20% equity (note I didn't say 20% cash, if you buy right you can use some of the built in equity as part of the 20%) before you make the first payment.Can property fall more than 20%, absolutely, but if your buying in the right property, the chances of that happening are very slim, and even if it did happen, as long as the property cash flows (I'm a buy and hold guy), you should still have positive cash flow to get through the dip in the market.Everyone has their own comfort level with leverage,,if you won't sleep at night unless you own a property outright, then don't buy until you can pay cash.