The margins are small but have done well.

The higher the 'safety' margin (to allow for your Tax implications and maybe re-deciding to hold, etcetera), the better.  

The additional overhead of dealing with the buyer, communicating with them throughout the process and them selecting champagne finishes with a beer budget can mean low margins on the upgrades. 

I could probably afford to pay up to 75 % but that leaves me with thinner margins. 

If you're well-capitalized, then this isn't the end of the world... you just spend whatever it takes and accept a worse margin.

We deal with very small margins but have found that since our houses are in great location, newer homes and we self manage our costs are actually quite low!

No.I learned many years ago never to work on marginal deals.

I understand the portion of the reports analyzing probable profit margins and various measures of return on investments.

If you can't handle the down-side, you might want to get out, and look for a deal with more margins to get back in.

I showed the house to two separate investors about 2 weeks ago - neither bit as there wasn't enough margin (I agree).