Cap Ex Single Family

[Ryne Ray]

Hey there everyone! Trigger-shy newbie investor here. I have been a long time lurker here on biggerpockets and thought I would share my biggest roadblock to investing in that first deal. Maybe you all can help get me over it, as I imagine some others may have the same fears. 

For a long time I have been analyzing buy and hold deals with 8% vacancy, 8% property management, $1000/year in repairs, insurance, property taxes, and of course mortgage. I thought these to be conservative numbers. I had no problem finding houses in my area that were in safe neighborhoods, and had good potential for appreciation. These houses also gave off a tiny bit of cash flow or broke even after all my "conservative" numbers. 

However! I recently read an article on the bigger pockets blog by a well respected/accomplished investor, talking about capex numbers that just destroyed any potential deal I look at. It was suggested that on buy and hold properties you would need to set aside $3088 a year for capex. When plugging in these numbers, I cannot find any way to break even or make positive cash flow short of buying the house all cash or putting 40-50+% down. 

Now this article was to steer people away from the 30k houses in the rust belt. However I can run numbers anywhere in the country at any price point and they just don't make sense. 

My question simply is this. Are these realistic numbers? Am I missing something? Is this just the market we are in. I know I want to get in to real estate as my retirement vehicle one way or another, so I will put more down on a mortgage to make it cash flow if I have to. Obviously I would just rather not. Any insight would be greatly appreciated. Hopefully there are some others that can learn from the wisdom you guys will no doubt lay on me. 

Thanks in advance!