@Pat L asked the tough question about how the tenant got past the screening process, although people can be good actors (hey, I'm in L.A.).While I could recount tales of tough evictions, I think the main takeaways that other landlords and would-be landlords ought to consider is:1) The incredible unforeseen waste that eviction creates for the investor that can be minimized by effective upfront screening;2) If eviction becomes necessary, not to get all tied up emotionally with the tenants' responses and just keep moving forward.

Having to go through an independent third party removes some of the ease of this, removing the personal tugs that come with family and friend events like this.Good intentions often fall victim to unforeseen events.

So with being armed with all of this, my question is; If we do our due diligence and buy right, what are some unforeseen ways that could cause us to lose money and potentially fail on our first deal?

You will need money for all the unforeseen things that can happen after a purchase.  

We get called out all the time for bids on house and most of the time I give a price for all the items that  it will take to get the house in order and some unforeseen things that are going to pop up.

Anyone worth doing business with in the future would be happy to help; (3) have a realtor run comps to make sure your ARV is on point; (4) insert a 10-20% contingency for unforeseen expenses--just a good idea as a new investor until you dial in cost of subs and materials; (5) put line items into a model including closing costs, rehab costs, carrying costs, realtor fees, actual cost of hard money, etc. 

The owner occupancy requirements can be waived when things occur that present a hardship to an owner by staying in the property, things happen that are unforeseen such as a divorce, separation, loss of job, job transfer, death of a family member or where an owner may be required to care for family, birth of a child requiring additional room, some previously unknown issue, say radon gas at a low level that causes some health concern, a child you is found to need a dust free environment can cause an owner some health, financial or other hardship, that, if that matter were known prior to borrowing or buying, the owner most likely would not have carried out the purchase.

How much are you setting aside for each property for vacancies, unforeseen expenses and other things?

I don't take any cash out of the rent since that method seems wrong for two reasons:1 - If I rented a property for 900/month, and took out 10% for my CR, that would mean at the end of a year I would have a whopping $1080 in the account (barring any unforeseen problems during that time period).  

The fewer items the association is responsible for, the lower your fees will be and the less chances of a major spike down the road due to unforeseen circumstances.