After budgeting for management, repairs and capital expenditures, it will cash flow around $150 per month.

Not only that but they are renting for well under 1%.Even at those numbers and super cheap financing and highly optimized operating expenditure profiles, this has to be an appreciation play rather than a cashflow play. 

But, as we have said the real problem is the potential maintenance and Capitol Expenditures (CapEx) costs along with vacancies (loss of income)  with these types of properties.You might be better off looking into the possibility of doing a flip with this property.

John, if you don't mind giving a few more moments of your time, with the increased expenditures, how would you adjust the offer to the owner?

You can start writing off expenses below $2,500 but the property has to be put into service.Any capital expenditures below $2,500 prior to being put in service are added to basis and depreciated once the property is in service.

These larger ticket items are known as Capital Expenditures .

Alternatively, an S corporation would treat those expenses as start-up expenditures under IRC Sec. 195.

Using those numbers, with 10% each for vacancy, capital expenditures, and repairs, I'm coming in at just over $100/mo for my cash flow, which is my goal. 

You also should set aside money each month for repairs and capital expenditures.

As a rule I generally assume expenses to be 50% of the gross income for my first look evaluation no matter what expenses the seller reports (unless its more than 50%, then I will use their number.)From there you can get into more detail on what type of capital expenditure budget the property might need depending on what physical condition and what strategy might be best.As far as due diligence once the property is under contract, or maybe before in some situations you will need a much more exhaustive list.