Higher returns typically come with higher risks.  12% on a rental property will probably be in lower quality neighborhoods, like B- or C, and most savvy investors will sharpen their stick enough to start poking holes in how that 12% shakes out.  

We have also had the bathtub refinished so it is a nice white and doesn't mold at all even though the vent doesn't work.

This will put me at approx 26k for normal financing.So I asked him why is the closing cost so high and he responded:Bank fees are approximately three to $4000, transfer tax is 1% of the sales price, and title insurance is typically 1% of the sales price.Does this sound fair?

@Ivan Barratt Curious why 65% instead of the typical 70% rule commonly discussed here?

I am sure there are still many emerging market opps, however the emerging markets generally that I see on BP as stated examples are typically far from emerging and or emerged many decades ago so there is a bit of bogus info out there on this emerging market stuff.

For those investors with 2-4 family homes in the Rochester, NY area, what are typical Cap Ex and Maintenance costs you've seen over the years?

I highly recommend against doing a cash out refi, it's a much riskier and more expensive strategy (and typically you can't pull as much equity) and there's really no need for it.

Typical closing costs are $1500 to $2500 but can be much less if you're buying with cash.

I would say that you are missing calculating in some typical expenses.

I've seen typical numbers of 1%-2% higher than your current rate.If you are looking to keep this property for a long time then go with a fixed rate.