At this point I am managing with spreadsheets for each property, rent rolls, and calculations on returns.

I spent the last weekend walking my target neighborhoods in Granada, looking at pisos and found nothing close to this good of a return.

I have a month security deposit for $850 which I’m not sure about returning. 

I have a month security deposit for $850 which I’m not sure about returning. 

My suspicion is that because of the hot market returns are being driven down.

I'd want to see the recent inventory that they've sold and if the returns meet your goals, that's something I'd dig into deeper!

Not a big business but still we take care of both sides properly to avoid turn over rates to increase more return to the owners by taking care of tenants quickly and rightly.

As long as you can show there is enough profit for you to pay the loan back and/or provide them with a cut of the return you should be good to go.The flip budget is the biggest thing to tackle because if you are off more than a little it can quickly take you from the black to the red.  

CoC return is not that high and Rent is about 0.9%, closer to 1% rule but on on lower side. 

A broker from Marcus & Millichap told me that this exact strategy can provide excellent Return on Investment if done right.