There's also quite a bit of value add potential because this is a commercial deal and decreasing utility expenses (while also raising rents to market rate, which they currently aren't) would directly drive up value.

I tried to stay away from really small markets.Then I looked at what the average cap rate properties were selling for and chose the top 5 attractive markets from my remaining list.

Get added to title alongside grandma, do a rate and term refinance in just your name.

But, it requires that we continually buy properties so that we can continually renovate and do cost segs otherwise, at the end of 5 years, the deprecation write off drops and our AGI goes back up. 

With this same property and an estimated rent at $1000 a month here are the numbers:Mortgage $485 (75k at 4.75 for 20 year amortization)Taxes $100 (This is a guess because I have no idea what they would be in your properties area)Insurance $50 (This is also a guess but I am basing it off of my own rentals)Property management at 10% $100 (This depends on if you will be managing it yourself or not)Capital expenses savings for repairs 10% $100Vacancy 10% $100Monthly cash flow = $65 (6% APR rate of return on your 13k left in the property).Now there are several variables in this example.  

@Brian LeskoHere's the number one thing I would check, the capitalization rate.

What does it mean when there is a high bankruptcy rate in a small town with no obvious reason?

Mostly the interest rate.

Is this at monthly rate?

There are some lender who offer jumbo loans with 5% down payment but interest rate will be higher.