To remain liquid, I'm considering putting a small amount of debt on it. 

How you underwrite income varies from person to person.Cap rate is used more in commercial than residential.Everyone's debt service will be different.If 80,000 has been verified as the NOI then off of 1,000,000 purchase price you would have an 8 cap.

Also the total return on the duplex would be approximately $5000 (cash flow + debt pay down).  33% ROI = 5k/15k.So I guess it's really a cash flow question vs a balance sheet question.

and comparing it to NOI... eeeehhhh I'm pretty sure that you're $275k more in debt than you otherwise would be, so you need to factor that in.

may I also recommend paying close attention to your Debt To Income ratio becaue the lenders I have worked with will not accept rental income as part of YOUR income until after 2 years of experience as a land Lord.  

I only have a small bit of landlording experience (as my last location was fairly cost prohibitive) but have a fair amount of cash,zero debt, and excellent credit.

Long in the tooth means it is nearing it's end for that asset type in the current cycle (peaking).If the debt is such that you can hold onto the property for the next upswing than not that bad.

Although I love these things, I don't like the noose around the neck feeling of the debt and many years of hard work to pay for the toy that loses its value quicker then you can pay them off.  

Secondly, we recently graduated and though we owe much in student debt, we have decided to put our payments on hold temporarily in order to invest in our multifamily unit.

Again the deal should be thoroughly analyzed for cost and risk factors but can really help you decide the price you should pay today for the cash stream.My style of investing is focused on a balance between cash flow and debt repayment.