I think I can easily raise rents $75 per unit over time.

Here is my actual dashboard below so that you can see my actual returns.

You will receive a higher cash on cash return and more importantly, this allow you to keep some money to invest in future properties faster.  

You can earn strong returns in a passive nature while (if you want to) continue to learn how the big players do it.  

what are the returns like with this house you have found, and what is that market like?

This addition is designed as a completely separate unit however it can easily flow into the existing house, creating a 3/2 with minimal work if needed.

-Lastly, is a 10% Cash on Cash return strong enough for you?

Yes, this happens and naive sellers fall into this pit frequently & easily. 

Seller is calling for best and final offer (multiple offers) and I am going up to 61K.I have gone above asking before but never more then 1000.I know the street the house is on very well and ARV is easily over 100 and it needs about 20K worth of work. 

If you could strategize your plan of action moving forward and wanted to return the highest ROI possible then one could encapsulate different markets and buy at lows, sell at highs then take profits to put into a lower priced rental that returns passive income with not much appreciation.