They will have additional costs for mailing & online campaigns to get leads.

In addition, you want a separate bank account for the rental property to separate it from your personal accounts.

The 2-3% points in extra cost are worth it if you plan on using as I described above because the use would be for a few  months at most and due to that short term use you can survive a rate adjustment up.But, if you have no plan to payoff the debt like when using for a down payment on a long term hold why pay the extra cost for flexibility and have the additional risk of the adjustable rate with the amortization looming when you can get a fixed rate second mortgage. 

Here are additional comments:1) Buying out of state removes any local knowledge you have from assisting in your success, including knowing areas, people and costs. - We always recommend buying your first rental locally if possible and DIY managing to learn as much as possible before investing OOS.2) Lots of crooks and incompetents in the PMC world:( They both cost you money.- As already stated, you'll have a small portfolio.

My last note would be to try to buy 3 or less replacement properties, it makes the exchange much easier and you avoid some additional rules.

Purchasing the LLC gives you ownership of the property, but it also opens you up to additional legal exposure since the entity has been active, and there is no way to really know for sure what else they used the LLC for.

I was fine with all these numbers.Then I met with contractors...First, I wanted to add a new bathroom and approximately 450 sq ft of additional living space.

With the economy of scale in multifamily, each additional unit nets you a little more than the last, as a rule of thumb.

All this in addition to 6 other lease violations... 

Most likely a "discount listing" Owner pays realtor a small amount upfront to add it to the MLS.