You need funds for emergencies and capital expenditures, which come pretty regularly. 

Capital expenditures like new flooring; 1000sf flooring @ $5 sf = $5000/8 year life span / 12 months = $52 per month capex.

No CAPEX (capital expenditures). example floors 1200 sf @ $5 sf = $6000 / 8 year life span / 12 months = $62.50 per month for just 1 item.

as far as i know COC % = NOI - DEBT / TOTAL CASH INVESTMENTwhere in this formula would the budgeting for capital expenditures get factored in?

(Don't need the cash for a down payment on another house if I choose to buy there).Have lived in the house for the past 5 yearsCurrent Value of House = 277,340Bought originally for = 232,000Original Loan = 209,000 Down payment = 23,000Mortgage left = 188,500Real Estate Agent believes if I sell I should receive, after all fees/costs/negotiation, approx mid-high 60k.Doing the math per month to rent out the property after getting quotes and refinancing for 3.25% for 3,800.Rent = 2,100Tax = -449Principal/Interest = -837Property Manager = -100Capital Expenditure = -183Rental Property Insurance = -156.403% No Tenant Fund - 63Net Monthly Income = 311.60House (built in 2007) is located in an in-demand area and is 3,600 sqft that includes a mostly finished basement.

. $291-$582/moPM: Property Managemen. 8% of rents: $688/mo unless you do this yourself.CapEx: Capital Expenditures.

Notwithstanding some safe harbors and exclusion exceptions if you have a large property, you’ll likely have to capitalize your $20k renovation expenditure and depreciate it over the useful life.In short, a $20k renovation will reduce your reported earnings by $1k/yr (depending on depreciation life), but it will not offset your $5k/yr net income.

It's a good start because there's low capital expenditure costs associated with owning a condo.

That being said I actually ran your numbers through a proforma I use and here is the break down for that: Purchase price: 129,900Effective Gross Income: 22,086 (vacancy 10% of gross income; 2454)Expenses:Expenses%EGITaxes $ 4,618.00 20.9%Insurance $ 1,500.00 Heat $ - Electricity $ - Water / Sewer $ 1,200.00 Trash / Recycling $ 180.00 Lawn / Snow $ - Management $ 2,208.60 10%Repairs $ 1,104.30 5%Capital Expenditures $ 1,104.30 5%Supplies $ - Accounting / Legal $ - Miscellaneous $ - Total Expenses $ 11,915.20 54%NOI: 10,170.80Financing: Down Payment $ 32,475.00 25%Bank Loan Amount $ 97,425.00 75%Interest Rate5.50%Closing Cost $ 7,794.00 6%Loan Term (years)30Monthly Payment w/ ESCROWDebt Service / yr $ (6,638.02)Debt Service / mo $ (553.17) $ (1,063.00)As is your property you're looking to purchase is valued at 7.8% cap rate and will produce cash flow of $3500/ year.

Capital expenditures can bleed all profit out of your deal