It makes no difference what percent you're aiming for if the unit cannot be rented, either because it's too expensive or too cheap in a bad area. 

@Ryan York - I agree with you that while the purchase price is lower than people from more expensive areas are used to, SFR still is not producing great cash flow unless you're buying serious fixer-uppers, in which case there's a ton of competition.

Direct mail expenses?

When I run the numbers I seem to get expenses (including vacancy) that is usually 55-60% of gross rents.  

It's too expensive. 

I offer to fund a flip of there house, they would get the number they were seeking for their house plus a percentage of whatever the profits are after all expenses, holding costs, realtor fees etc..have been paid.

However, I would recommend talking to a qualified professional to avoid expensive charges down the road.

Although I did not retain her because I do not have enough properties to justify PM expenses, I definitely feel her knowledge in PM and drive for results are outstanding.

Rationalization is the most expensive word in the REI vocabulary.  

Again, the point here is more that my current market is extremely hot and expensive, so I'm looking to move to another market.