With more expensive homes they take longer to sell so beyond basic information for a listing do not spend thousands.

After cap expense we're cash flowing $400 a month!!

Lower market cap rate means it's more expensive, not cheaper.

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.