Need help with decision on single family rental home

[Dave Halsey]

I am now working on my 4th rental property and would like your advice. It was brought to me by my realtor who also owns a home investment company (he has been my primary source of mentoring/partnering along with my BP community). This is a "turn-key" investment, meaning the home is in beautiful condition, no immediate repairs/upgrades needed, and it has a solid quality renter in it. The current owner is a Canada resident and shedding off some of his Michigan investments to focus more on business he has in Canada. He's an older man that is "cashing out". The home is also in an exclusive and appreciating area south of Detroit called Grosse Isle. The median sale price is $260k and this 820 sq ft, 2 bedroom home, is being offered to me for $74.9k. My realtor believe it will be appraised at $80-$85k. Here are the numbers. I don't have 20% available to me right now but I can get it out of another rental home that has appreciated. Closing costs are $4.5k which I can pay out of pocket. The renter will be paying a new rate of $875/month starting in March. If I finance the entire $74.9k at 5.25%, and use the typical % in the tool, I come up with cash flow of $115/month and a Cash-on-Cash ROI of 30.5%. If I was to fund the 20% down up front I can get to $200/month cash flow and a 12.2% Cash-on-Cash ROI.

I can also see if he can find a couple thousand in savings on the home/closing costs to sweeten the pot.  This seems like a marginal deal to me and I would like to see more cash flow, but the fact that it is turn-key, very little maintenance, great renter, in a high value appreciating neighborhood makes this more attractive to me.

Appreciate anyone jumping in to help me with this decision.