It's reality.

The reality is, a lot of people do quit claim deed the property to their LLC.

But in reality that down payment is part of the cash out refi, so if I apportion my refinanced mortgage payment to this new property, my cap rate falls to 2.5% and I'd be cash flowing just making a few thousand dollars in a year while net income would be in the tens of thousands still.Should I be calculating differently, since nothing is coming out of pocket for me - as this would essentially be a 100% financed property? 

I wouldn't toss anyone in real dire straits (including Mark Knopler) but in reality few people actually get to that point. 

That is bad advice by bad actors who only care about selling programs, books, commissions etc vs telling real actual factual reality and sound advice. 

And the practical reality is that if I'm doing a deal out-of-state, I'm going to be using outside counsel.

In reality, what you're paying for is: InsuranceProfitTaxesLaborExperienceMaterialsIf you figure uncle sam took about 30% of whatever he charged you ($23 there) and subtract materials cost ($10), labor / travel time to lowe's, fuel, vehicle, insurance, tools, etc. you can quickly see how there isn't a whole lot of profit there.

The reality of the matter is that macroeconomics do not affect the small landlord nearly as much as microeconomics.

Sounds like you want this deal to work real bad, but you need to ground yourself in the reality of the situation.

I think it would be pretty foolish to run your numbers based on projections rather than realities, and for that I think you are correct in how you are running your numbers.The reality is that if your market is anything like mine (CT) it's incredibly hot right now.