I have a burning desire to get started with rentals but I don't quite have capital to pay 20% on something of quality.

@Chris VanDenBerg   There is a huge shortage of quality contractors in the Dallas area. 

Reserves are going to be a bit of an issue because even a bank will want to see healthy reserves in determining whether or not you can quality for the loan.

Excellent job, BTW ... because you did so well on it, you now almost have too many choices, which is a very high quality problem to have :)

The direct to sponsor model that bypasses a layer of fees tends to attract higher quality folks.  

Our property is in a good school district and a decent neighborhood, so I believe we can attract quality tenants otherwise.We've considered the idea of putting of fencing down the middle of the back yard or something similar.

The cheaper $100k property might be in a less appealing area with a lower quality of tenants, and high tenant turnover or missed rent payments could affect your ROI outlook.Personally, regarding the situation above, I would take the deal that is a little less ROI, but gives you better security on your investment.

I've seen low quality properties trade at low cap rates.  

To give you a sense of quality, below are some pics of kitchens and baths of recent remodels. 

Depending on the quality of materials the pricing will vary but we were quoted $180K from one contractor and $400K from another.