Preparing for the worst

[Tony Mi]

I'm studying up on Buy and Hold real-estate investing. So many of the resources discuss how to get the deals, what steps to take to be successful, but I haven't found many that describe what happens on the worst case scenarios and how good investors overcome those issues. For example, how much in reserves should one have to ensure they never lose the property to foreclosure? What sort of savings should you have on each property in case it goes vacant, has to get evicted on, etc? What are the best steps to take if your property is destroyed either by a natural disaster or one hell of a tenant/accident?

Are there any books that cover these sorts of contingencies fully? I know some folks say things like save 6 months of housing payments in case of, but is there more to it? What would be the least prudent to be safe and what would be considered the most prudent?

Thanks,
Tony