The flooding damage cost about $10,000 to repair, and now we've been going back and forth via our property manager to settle the claim with the insurance company.

Hi Everyone,     I am aware Colorado law prevents landlords from charging the tenant's security deposit for the time the landlord spends on repairs (though they can charge materials).

On one side it's good because you don't have any vacancies but it can be bad because many times rents are under the market and there might be needed updates and repairs that are hard to do with tenants in the property. 

When the transaction closes, the purchase is funded, and we set aside additional funds in an escrow account to pay predetermined professionals to make any required or desired repairs or upgrades to a property AFTER the buyers settle on the purchase transaction.

Does the cash invested include any repairs/upgrades?   

Repairs needed, conditon of the property, preventative maintenance needed throughout the year and who will handle4.

My Guess is these are likely small enough items/repairs that probably weren't looked at too deeply or considered during the due diligence and inspection, which I would totally understand.

If you’re resurfacing your rental property’s garage floor, the key question is whether this counts as a repair or an improvement.

Additionally, covering unexpected repairs and meeting lender requirements can pose obstacles, especially for newer investors. 

So, given you are in a lower end area with lower rents, you need to reserve more money on repairs, maintenance and capex compared to a higher rent area, since that $200 HVAC or plumbing service call is 25% of $800/mo, but 10% of $2,000/mo.