I disagree.CAP rates are of marginal truth or consequence for a SFR.  

It had a huge profit margin and mostly cosmetic work, priced very low even for an REO.

If it's a marginal deal or not much EM at stake then might want to walk.No legal advice.       

Unfortunately the back taxes are so great that when you combine the rehab cost there is no margin for profit.

Specific to your post above, I agree that that $300 margin doesn't account for property management, any expenses, etc.  

Add your margin and sell the property before you actually close on it.  

I'd also suggest you call that office to find out their filing requirements, they can be very specific, type size, font, margin requirements and space for recording stamps, otherwise they may reject the filing request.

You already know there is not enough margin for a flip.

The trade off that I pay for with these nice rentals is smaller margins.

I would market for leads like crazy (the difference between a deal you get from marketing and a deal you get REO will often exceed the 20k you just spent on marketing), then take each lead individually and get what I can and be open to ALL exit strategies.That way I could take my rentals Sub2, flip the ones that have the biggest margins, and wholesale the rest.