Nothing unexpected in that statement.  

You really have to adapt to taking advantage of tiny bits of work time--but it's hard to readjust when the baby wakes up unexpectedly or just won't cooperate.

Your money is made at the time of purchase and based on the scope of work as outlined in your post, at a $80,000 purchase price you won't have a good enough flip margin with a contingency budget for those unexpected "profit killers".

I'm pretty risk averse so I like to have room for the unexpected.

Had I used your Rule of 5, I would have bought both of them and had multiple tens of thousands in unexpected expenses. 

What having cash allows is for three things:1)  The ability to pay for unexpected expenses.2)  The ability to quickly act to take advantage of good investment opportunities.3)  The peace of mind knowing that you can do #1 & #2 because of your cash position.

Unfortunately, the expenses are still variable and are always unexpected is such properties - the price of a roof, hot water heater, or air-conditioning compressor replacement will be about the same, regardless of market size.   

I have seen this fubar people when they spend 95% of their IRA funds on a rental then have unexpected expenses and do not have the reserves and have already contributed to it for the year.what do they do in that circumstance Dmitriy is there a hard ship they can use .. or what ?

And I actually estimate 10% for vacancies and 10% for repairs to allow for unexpected contingencies...you'd rather be generous on your expenses to ensure you are still cash flow positive than to underestimate them and be cash strapped.

Things will happen and unexpecteds come up.