question regarding dscr and expences

I am looking to purchase my first apartment building.(4 unit)
I am running the numbers to see at what purchase price it would be profitable for me. and i would like to know if my numbers are too high. I am figuring operating expenses of 40% of gross rents and a 10% vacancy /collections loss. in using these figures it seems my offer would be way below asking price to break even. I am also figuring out what my dscr would be as i understand lenders are looking for a 1.25:1 at a minimum. any help would be greatly appreciatted.

Debt Coverage Ratio

Also known as Debt Service Coverage Ratio (DSCR).  The debt coverage 
ratio is a widely used benchmark which measures an income producing 
property's ability to cover the monthly mortgage payments.  The DCR 
is calculated by dividing the net operating income (NOI) by a property's
annual debt service.  Annual debt service equals the annual total of all 
interest and principal paid for all loans on a property.  A debt coverage 
ratio of less than 1 indicates that the income generated by a property 
is insufficient to cover the mortgage payments and operating expenses. 
For example,  a DCR of .9 indicates a negative income.  There is only 
enough income available after paying operating expenses to pay 90% of 
the annual mortgage payments or debt service.  A property with a DCR
of 1.25 generates 1.25 times as much annual  income as the annual debt 
service on the property.  In this example, the property creates 25% more 
income (NOI) than is required to cover the annual debt service.

Example:  We are considering buying an investment property with a net 
operating income of $24,000 and annual debt service of $20,000.  The 
DCR for this property would be equal to 1.2.   This means that it generates 
20% more annual net operating income than is required to cover the annual 
mortgage payment amount.

                                           Net Operating Income               $24,000
Debt Coverage Ratio  =  ------------------------------  =  -----------  =    1.2
                                            Annual Debt Service                 $20,000

Many lending institutions require a minimum debt coverage ratio value to 
procure a loan for income producing properties.   DCR requirements for 
lending institutions may vary from as low as 1.1 to as high as 1.35.   From 
a lending institutions perspective, the higher the debt coverage ratio value, 
the more income there is available to cover the debt service and thus the 
less the risk.

Net Operating Income (NOI) is calculated as follows.

                 Gross Rents Possible                       35,000
                 Other Income                                    2,000
             Total Gross Income                              37,000
                 Less Vacancy Amount                        3,000
             Gross Operating Income                      34,000
                 Less Operating Expenses                 10,000
              Net Operating Income                         24,000

Operating Expenses include the following items; advertising, insurance, 
maintenance, property taxes, property management,  repairs, supplies, etc.

Lenders use the debt coverage ratio to determine if an income producing 
property has sufficient income to cover the operating expenses and debt 
service.  To acquire a loan for an income producing property, the debt
coverage ratio must usually be greater than 1.1 and most lenders require a