i get away using a 3% vacancy rate.  

@Jerome Hanson Perfect summary of what I meant to say.  

Do you know that I gave them an eviction notice the first time they were late and they have been PERFECT ever since.

If a property is newly remodeled, then you can get away with lower initial CapEx funds in your reserve account, but the $/mo figure calculated above does not change nor should the CapEx monthly expense.

It makes perfect sense to only put 3.5% down, my thought process was that it would lower my mortgage payment, but you're right it wouldn't be by anything substantial.

This is the perfect place to find answers to all your questions.

@Joel Owens @Ryan Jenks  just to add to the conversation from personal experience.I have two collogues that against my council  sold there perfectly good west coast multi's to try to scale up in units and go down in asset class.one bought C to probably D in Memphis rubbing their hands together at the 15 to 20 cap they were going to get.. they lost 400k in 18 months on it and could not exit quick enough.. only locals can handle those.the other sold her PDX 60 unit for a 5 cap made 700k... bought 300 unit C class in Oaklahoma city. because of the 10% cap being touted.. and after the managers and maintenance folks stole her blind guess were she had to move to. it was her entire net worth wrapped into that property.. 5 years later ( took her that long to stabilize and get decent enough books to exit for what she paid for it.) she sold moved back to PDX bought a 20 unit and condo on Maui  LOL...

In that regard, everything has been perfect.

If it doesn't move you closer to your perfect life, don't buy it. 

If so then I have the perfect solution for you.