I'd target areas near colleges or transit hubs for affordable properties, and I’d look into financing options like FHA loans or creative financing to make the most of my capital.

Here’s the bottom line; unless the deal is VERY large, or the sponsor is going to syndicate a large number of deals, the investor will make more money purchasing the property theirselves with a option low to moderate interest rate loan.  

Is there typically an ROI?

You have many options here.1) Terminate the lease: It clearly states that they must have renter's insurance and the lapse can result in a default2)Have them cover the damages with sufficient evidence that they caused it3) Claim it on your insurance for the property, likely they won't give a good payout unless a fire, flood, or some sort of wind damage.

That's a typical scenario and could cost you $10,000 - $15,000 so that would be a good starting point for your reserve.But there's more!

@Amanda Bradley Tenant sounds like typical Class C with a credit score under 620.How hard was it to find this tenant?

What I've seen is that when asked to provide an assurance that a loan wouldn't be called because of a due on sale clause being triggered, the lender customer service typically just outright says it's not allowed, or default to a "no", because they see it as a black and white question, and miss why the due on sale clause is actually written into the mortgage document to begin with.If one is transferring property title from personal name, a Grant/Warranty Deed would be drafted/recorded to transfer title.

I am perfectly fine holding X amount in real estate.If I do see an opportunity another option is to lock it up and sell one of my existing if I think this property will perform or appreciate significantly more.

We have much more robust capabilities in MLS that typically in most areas aren't available to the general public. 

I am not there yet, and hope to not have to go that route, but would be good to know all of my options.