Investing in SFR with 10% downpayment in Arizona

[Mike M.]

So I currently own my 3 bedroom townhouse in Scottsdale, which requires monthly debt service of $750 a month, not including a $150/month HOA fee. Given the location and market conditions I believe I can rent it out for $1,800 to $2,000 /month. That being the case I would like to find another townhome in Scottsdale, or Tempe area (by ASU) that can duplicate this process with.

I have $30k saved up but am finding in my calculations that the margins are very thin if non existent...

Based on a proforma estimate of a new property that I would purchase for $250k, of which I would finance $220k, with $30k down:

$1800 rent/month or $21,600/year

Revenues

+ Gross Income $21,600

_ Less (10% Vacancy) $2,160

= Effective Gross Income of $19,440

Operating Expenses

-Management fee (5% of EGI) of $972

-Replacement Reserves of $1000

-Home Warranty of $500

-HOA fee of $150

=Total Operating Expenses of $2,622

NOI  = $16,818 ($19,440-$2,622)

Debt Service = $16,752

---------------------------------------

Cash Flow After Debt Service = $66

DSC @ 1.00x with a 7.64% DY. 

Debt Yield while being low, would be mitigated by property location and asset type.

----------------------------------------------------------------------------------------------------------------------------------------------

How can I find a way to make sense of a deal like this? Without collecting higher rents my only way to increase cash flow would be to put more capital into the deal. How would i know what average market rents would be in my area? Looking online I see numbers all over the board, from $1,400 to over $2,000/month. My goal would be essentially to 'rinse and repeat' what I have done now: buy a property, live in it for a year or two then rent it out after purchasing a third property.