How much are closing costs? 

Hi Jagger-Great question.I am a fellow Michigander from Ann Arbor.Nothing against Maine but the Midwest has seen some of the strongest rent growth in the country.When I consult with my clients, if they don't have the budget for a market like Ann Arbor, I direct them to Lansing, MI.The cashflow is strong, the economy is stable, it is the State capital so there is always economic development creating new jobs, the price point is relatively affordable because the cost of living is lower there, and appreciation is predictably linear.I also advise investors to buy duplexes and up so you always have a rent check coming in most of the time if you have a vacancy.

And how much in closing costs would I have to pay out of pocket.  

Get the cost analysis and blue prints done and work it out with the construction loan committee and start the work draw phase.The other options which can be a little easier is buy a home that will pass an Inspection/appraisal and not be "Subject to" but does need a lot of TLC/renovations and do it yourself.

The disparity between home costs and rent costs are not even across the U.S.

You can also ask for a 'Seller Credit" which helps cover closing costs or buy the rate down if you come in high enough on the purchase offer.

CMG Financial.America First Credit Union 80% CLTV UT, ID, OR, NM, AZ, NV at 10.49% in 2023Arvest Bank AR, OK, AL, MO Bancorp South, TX HELOCS & Lines of Credit on free and clear housesBankNewportBank of Southern California, CABank of West (BNP Paribas) 60% LTV CA, AZ, ORfBankRIBB&T will loan on a rental portfolioBBVA, now PNCBECU for ORBeehive CU, UTBest Finance www.bestfinance.io No closing costs, fixed ratesBellwether Community Credit Union, NH and MA 85% to 100%, draw 10 yrsBMO Harris, 3 HELOCs to 70% LTVBoeing Employee Credit Union California Bank and Trust, CA *** confirmed in 2023 ***Cal Coast Credit Union, CA Central Pacific Bank, HICFSBank will do on LLC, PAChange WholesaleCharter Oak FCU, CT Chelsea Groton Bank, CT IPLOC (investment property LOC) Citizens Bank -MNCitizens, first position HELOC CMG Financial 70% LTV.

Light cosmetics, generally a quick rehab and low cost

You sometimes go into the blind off of visual inspection alone because it's a good enough deal to absorb those types of costs. 

And if they lease new tenants every year you will likely have turnover costs to add as well.