If the funds were truly a gift, then you're already making infinite returns :)

In that case, CoC is infinite (or meaningless because you can't divide by zero). 

Add up 3 months of mortgage payments, taxes, insurance, utilities, property maintenance, $2,000 in repairs, and if you're using a property manager... they're probably charging you something for tenant placement.This really blows the "infinite rate of return" out of the water when you have to keep $5k liquid for reserves at all time.

I am using cap rate because that was what I used to review the deal considering CoC is infinite since there is no cash in the deal. 

Not to mention you can scale infinitely with a Series LLC.You can also set up an additional traditional LLC on the side to perform your "operations" that would separate the liability for operations from your assets, or properties.

That comes out to a ROI of 40% on that money.  2.5 years to pay it back essentially and then our return is infinite after all the money is paid back. 

I'm not really understanding how my cash on cash return could be infinite but I guess I don't have the best understanding of how it's calculated.

For example, if, as a seller,  you are an amorphous blob and can't do anything, the number of things you need the buyer to do is near infinite.  

I personally find the Series LLC to be a great tool for the individual investor who is planning to expand their operation, as it allows for you to scale infinitely - check out this article to learn more.

One thing that can save you money in the long run is establishing a Delaware Statutory Trust (DST), which can offer you a unique twist on the liability benefits of the LLC and infinite scaling but does not hit you with the annual $800 franchise tax in CA.In your situation I would recommending sitting down with an experience attorney and CPA to get their advice on your situation and future goals.