Biggest Risks with Multifamily Investing

[Charlie F.]

Hey BP- I'm a new prospective RE investor, have done my research and have capital to deploy, yet to do my first deal, but looking in Rochester NY, as Jake&Gino referred to it as the "cash flow capital of the world". 

There are some very clear benefits to multifamily RE investing. But what about the risks? In particular, I'm wondering if I buy a property, lets say it cash flows at $2K per year. What happens if there's a major problem like needing to replace the sewer tank, or a new water heater or something? What does insurance cover? It seems that cash flow could get wiped out very easily, does anyone run into these issues? Any other big risk factors with a multifamily cash flow strategy?