Deal or no Deal - Newbie

[Mike M.]

Under contract on my first deal in a small town (100k people) in northern California. It is a town that has had steady, slightly above-average growth in comparison to national average for property values, jobs and population over the last 20 years, but nothing crazy like the larger CA markets. After doing the diligence, walkthrough, inspection, speaking with local management companies, the cash-on-cash return year 1 is penciling out to only about 6.5% after some small rent raises and rehabs. I'm financing with 70% loan, but putting almost all of my excess cash down on this even after that, so won't be able to do another deal for a year or two. I'm on the fence whether this is a good deal or not - It's CA, so not expecting crazy cash flow, but it's a smaller town, so won't be gangbusters appreciation that I can bank on (not that most people recommend doing so, but in CA, you have to a little bit). 

Purely from a cash on cash return perspective, for a small town in CA with above-average growth historically and some good market indicators for future growth, is this a good deal or a bad one?