Operating costs I try to estimate somewhat conservative= $1000 a month.    

But 10% down is certainly not the "conservative" approach. 

Built in 1973, in great condition, although does not have current upgrades.Since I am not yet a PRO user, I based on my rental calculations using great calculators from ListenMoneyMatters.com.SUMMARY:ESTIMATED VALUE (Zillow): $214,714.00 (In line with averaged real estate agent's Comps but slightly more conservative, as I think he threw in a couple outlier properties to bump the average a bit to entice my folks.)PURCHASE PRICE: $195,000.00 (price based solely on the amount left on my parents 4.25% HARP non-assumable mortgage)UPFRONT COST: $50,587.42 RENT ESTIMATE: $1750.00 ANNUAL NOI: $11,633.00GROSS YIELD: 10.79%CAP RATE: 5.98%CASH ON CASH: 5.56%CASH FLOW:ANNUAL: $2760.32MONTHLY: $230.031ST YEAR EQUITY: $2363.49ACQUISITION COSTS:DOWN PAYMENT: $48,641.75 (25% ) CLOSING COSTS: $1,945.67 (1%) *anticipate only using real estate attorney (no real estate agents) for more cost effective deal and save parents 6% commission; do not know actual attorney fee costs for closing so this number is a WAG (Wild *** Guess).MORTGAGE RATE: 4.5% *anticipated MORTGAGE TERM: 30 years ONGOING COSTS:PROPERTY TAX: $1,927.00/yrPROPERTY INSURANCE: $300.00/yr PROPERTY MANAGER: $175.00/mo (10%) VACANCY RATE: $350.00/mo (20% vacancy rate)MAJOR/MINOR CAPEX: $175.00/mo (10%)HEAT/AC: $92.00/mo (Averaged)HOA: $420.00/mo (has remained approx. $420.00 for decades; although the HOA just hired a property manager for the first time last year, but so far no indications of changing HOA fees)Notes:Rent estimate: $1,750.00 (local property manager assessed realistic rents between $1600-$2000+ per month on long-term lease or as vacation rental $140-200 a night/minimum 1 week stays).My parents are open to any type of creative financing deal, that would free them from paying mortgage (their current monthly mortgage payment is $1,000.00 (+ $420 HOA).

I'd be tempted to be conservative.  

@Justin Fox so if after I take all those deductions and I'm taking a loss, then setting aside 15-20% of the income that I end up using would be pretty conservative, right?

I would say im a bit more on the conservative type, I personally wouldn't consider debt a form of reserves for maintenance.What are your thoughts?

I am a very conservative investor.Share your experience or financing ideas.

The owner told me she is willing to go down in the offer (she knows that needs work) AC&HEATING, electrical, Plumbing and fixture, Crawl Space, roofing and attic.I got an estimate from a contractor and he told me around 30k-40k for the rehabNot sure about my number but this is what I got ARV= $ 130K-140K could be more but I'm a little conservative! 

Appraisals on refinances are more conservative than on a sale.

This is a residential property so you'll be able to get it at 3.5% down, your loan payment would be $2,960 (4.5% conservative rate).