I'll just serve notice, keep my mouth shut about the pig, and hope for the best. 

@Aaron Palao You'll generally need a net worth that's equivalent to or greater than the loan amount, liquidity that's equivalent to  or greater than 10-20% of the loan amount, and experience on similar sized deals. 

If you are investing in a nicer area, medium to higher-income residents, then a decent sized portfolio of single family homes can be beneficial in two major ways1.

All markets you list will still be cities with populations forever, and your exit will be to a resident in that market, so population growth/decline, employment drivers, etc are of less concern relative to a large, institutional sized apartment complex.  

But, I've also heard new investors take the full dive right into full guts because they want the experience and want to run into every situation that can occur during a rehab of that size.

They also place a minimum per month rate of $500/mo regardless of income/property size to make sure the property is worth their efforts, so in your case the rate may be significantly higher than the quoted 5% if management companies in your area are similar. 

With that in mind, rejecting the assignment of lease (assuming the new person qualifies) would serve no purpose, and is therefore unreasonable. 

My husband and I have a local portfolio, like many others, as well as, serve as a general partner on a couple properties in Houston, TX (syndication).

They are excellent primers for new investors and serve as an overview of the processes.

I'm glad you've learned some tweaks to make the next round of this even better, but don't minimize the "win" that this one was, both for you, the buyer, AND the seller you served with the cash offer!