It may mean the repairs are significant, or it is in an undesirable area. 

As Kenneth said, make sure you factor in vacancy (8%), capex (5%), repairs (7%), prop mgmt (5% even if you do it yourself).

Other than not being directly involved with the real estate (homeowner is responsible for repairs, taxes and insurance-which can be considered a pro) They claim their default ratio is 3% and that they have no problem getting homeowners to purchase.

I’ve renovated the house from top to bottom, removing walls relocating bathrooms etc. and last year I sold off the extra lot which was now on a new road and 1031 exchanged it for a fixer-upper in Nashville Tennessee, repaired it and that is now rented out.  

Also if you have rental units you want to make sure that you have sufficient reserves should the need arise for a major repair. 

I'm an out of state investor so I'd prefer minimal rehab/repairs.

I purchased the property for $10,000 and will need approximately $15,000 in repairs (I am doing most of this by myself with my business partner.

However, if vacancies do occur you are at least covered for one month.5% is okay for Maintenance/Repairs.1% for CapEx is crazy!  

(Utilities were rounded up on my part)The asking price is $115K (in a very small town, but the biggest town within a 50 mile radius).Monthly Rent                                          280010% Vacancy                                        -    280Gross Monthly Operating Income     252010% Property Management                   28010% Repairs Maintenance                      28010% CapEx Reserves                                280Property Taxes                                          280Property Insurance                                   200Heat                                                             270Electricity                                                    225Water                                                             75Monthly Operating Expenses              1890   Total Annual Operating Income           30240 Total Annual Operating Expenses     - 22680Annual Net Operating Income             7560Purchase Price                                    115000Cap Rate                                                6.57%25% Down Payment on Loan             28750Loan Amount                                        86250Closing Costs                                             300Length of Mortgage                             20 yrsAnnual Interest Rate                              5.0%Total Annual Debt Service                  6831Annual Cash Flow                                    729Monthly Cash Flow                                  $60Cash on Cash ROI                                   2.3%When I first saw a "6 unit apartment for only $115K" I thought it was a gold mine.

The reasons may not matter, but basically there have been issues that required several repairs.