* The conversion would be costly. 

I think it was for down payment and closing costs.

Vacancy hurts a bit more, but the biggest issue with renting out large homes is turnover cost.

Understand that the cost to the investor is only the cash that's out of pocket. 

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

Also, how much did the electric and plumbing fixes costs?

What they will offer you is an appliance package, or closing cost help, or a low fixed rate loan. 

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

Coin jams are going to be your second biggest headache unless you invest in those fancy ones with tap-to-pay but those cost a pretty penny.

If I can make a suggestion...Yes with 3 points you might be able to get into the 6's - but let me give a quick example:Let's say loan amount is $250k and making some other assumptions, paying 3 points down would cost $7,500 however that might only save $195/mo.