Down payments are still standard for FHA or conventional (3.5% of the total cost, purchase+construction) and rates are on par with standard FHA rates. 

We have substantial closing costs on the sale, primarily transfer tax and realtors' commissions.

Usually after walking through the property he is able to give me a good ball park figure of what the renovation should cost barring unforeseen issues.

And most tenants will not hire a pro painter, but just do it themselves.....Not priming over old trim, sloppy paint, drips, etc...will just cost you much more to fix when they move out.Using a Licensed or professional painter that they pay for would be a different matter, then I wouldn't mind.

Corporate travel, divorce, etc. are other potential tenants.If costs in your market allow, I would encourage a duplex purchase vs SF...potentially 2 income streams vs 1 would help offset the extra cost of a duplex.  

@Steve Boss,  Here's a BP blog we wrote recently on costs nationwide - https://www.biggerpockets.com/blog/how-much-does-a-1031-exchange-cost.Just because an exchange is cheap doesn't make it bad. 

Plus there would be closing costs again.We are open minded about solutions. 

I wanted to seek some advice and opinions from this community before making a decision.Do you think the management fee and the additional services provided justify the cost?

I just had an application process and utilized rent prep for the background/credit check, I found it to be a useful tool and worth the cost (about $40).

There are also additional costs of operating and maintaining an LLC, like separate bank accounts, annual report filings, tax filings, etc.2.