We went into full time real estate investing somewhat unexpectedly like some others on here.

I like to budget accurately and anticipate an overage fund within the budget to cover unexpected amounts.  

Solid cash flow ($100+/door/mo) will protect you from many unexpected events and at this point anything is unexpected since no one has a clue what is going to happen in the next few years (or even the next few months). 

Saying "I see a recession on the horizon" is like saying "I see bad weather in the future" or "something unexpected will happen next month" or "someone close to you will die".

I am currently house-hacking and there are a lot unexpected expenses that I have dealt with and it's only been 6 months now!

It would work - but the market (yes I am invested there as well) can be unexpectedly volatile (COVID is a good example - my portfolio dropped 28% in a week).

You can't really go after the selling realtor or the government seller over an unexpected issue on a foreclosure, the contracts you sign are completely one-sided in their favor.

An emergency fund will serve as your cushion, and your investment funds should be enough to cover all of these "unexpected" investments. 

Owning rental property is full of unexpected expenses, some can be costly.

Don't pay yourself until the savings account has enough in it to cover major unexpected events.