The flat rate charges I've seen so far seem to push my estimated monthly PM expense up to 13 - 15% of monthly income.  

As a rule of thumb, a 50% expense ratio is conservative and a good estimate.  

Try to estimate with a spreadsheet while walking through all the repairs that will be needed. 

I am estimating we can purchase this home for 35k to 45k it would need 40k to 50k in repairs and the ARV would be 175k.

Given my estimate of rehab expenses (again, based solely on photos), ARV and associated costs, I'd pay no more than $70k retail for the deal (so not including a wholesale margin)Depending on your deal with your broker, you can most likely do better than the 6% resale commissions, right?  

Scott The Book on Flipping Houses, The Book on Estimating ReHab Costs http://www.biggerpockets.com/flippingbookConsider checking out HUD homes for small multi's owner occupied gets first crack.

@Tim Shin I really like the BP calculator for back of the envelope high level estimate, but you're right that every property will have different expense ratios.For example - one of my rentals is a brick home, energy efficient with an older A/C unit.  

The problem is that if they bid the job at what it needs to cost and realistically estimate the time, they won't get the job because a person who underbids and underestimates will get the job.  

Option 1) buying in cash for self use 3 year cost/gainGainsestimated 2% property value gain per year on $200,000 (cash cost of house) = $12000losseshouse insurance per year $1000 = $3000property tax $2000 = $6000heat and water = 700/year average = $2100 lossupkeep of house = $3000 (3 years)total loss =  -$2100 (3 years) ------------------------------------------------Option 2) renting an apt/house for self use 3 year costGains $150/m maybe on $200,000 bank interest gain = $5,400 (3 years)Losses$1000 per month = $12,000 = $36000 (3 years) (no heat and water costs, no home insurance, no property tax though)total loss =  - $31600 (3 years)-------------Option 3) investing to rent out house entirelyprice of home $200,000 gain $12,000 rent per year at $1000/m = $36,000$12,000 % increase per year value = $36,000(at estimated 2% value per year increase)lossinsurance per year $1000 = $3000property tax $2000 = $6000 (3 years) $150/m maybe on $200,000 bank interest gain = $5,400 (3 years)heat and water = 700/year = $2100 loss (3 years)upkeep of house = $3000  (3 years) total potential gain $72,000 over 3 years - $19,500 losses Total gain =  +$52,500 (gain in 3 years)--------------------------------------------------I never really realized there was such a difference.

I'm leaning more towards Tacoma but I need someone to walk me through and hold my hand while I look in Redfin and figure out what the difference between the price and the estimate is all about and what it means for the future value of the property.