Servicing a friend's Bikes Direct Dawes single speed.

I'm really unimpressed with Bikes Direct. The Formula hubs seem to have had very little grease, and were adjusted way too tight. I replaced the balls. The headset was similarly almost grease free and extremely tight, I thought it was brinelled. Grease and adjustment fixed it. The brake cable housing ends weren't seated in the lever bodies, and routed with sharp bends and lots of friction. I fixed that and replaced the cables, so now her brakes actually work. The wheels were fairly true, but the rear has an intractable bulge - that might be damage from a pothole or something, though. I don't have the appropriate tool for the bottom bracket so that will remain as is, I figure it is probably a cartridge anyway. The freewheel on the flip flop rear hub sounds bad, noisy and scrapey, but a bunch of oil helped a little. The dropouts are not parallel. The seatpost is ridiculously long. It is a small bike and she is a short woman, there is enough post for a six footer.

Yeah, it only cost her $300 and has served as basic transportation for 2.5 years, but $300 would have bought a far nicer used bike that would have been much nicer transportation.

Anyway, it is almost done, just needs new bar tape, but I have a question because I don't know single speed bikes. How loose or tight is the chain supposed to be? I have it just loose enough to avoid a noisy spot when pedaling. With light finger pressure on the middle of the upper run of chain, it sags about 1/2". Does that seem okay?