Our realtor has informed us that they will address two lower cost items on the exterior of the home and want to provide us with a cashier's check at closing to address the other three. 

Now I know this isn't an apples-to-apples comparison but to me I would seem to think that Class A properties would have a lower cap than a C+ value add property.

Thats why I was considering markets which might have lower barrier to entry probably capped at about 300k 

Here's what I’m considering for each:Houston: Diverse job market and high rental demand, but property prices are rising.Midland: Potentially lower property prices, but market stability often ties to the oil industry.Oklahoma City: Affordable market with decent rental demand, but I’m curious about long-term growth potential.Pittsburgh: Growing rental demand, especially in areas like Mt.

Is this more likely in higher cost markets or lower cost markets?  

Most Helocs carry a higher rate and over a shorter term where as a Mortgage offers a lower rate over 30 years for the lowest payment.You might have a low first rate and not want to refinance but trust me the blended rate between a low first mortgage and a High rate Heloc tends to have a higher payment.

Your credit score (672) is a bit on the lower side, which may also be contributing to the higher interest rate and cost.Have you looked into working with private lenders or small local portfolio lenders?

:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

In other words, you would get the same rate at 60% LTV that you would at 50% or lower.

If you take the lower value areas the only reason people choose to live there is the affordability really.