That way there is plenty of buffer room for unforeseen expenses such as capital expenditures, vacancy, and repairs. 

Unforeseen circumstances such as natural disasters can quickly lead to nightmare scenarios that will be the responsibility of the landlord to remedy.

There will always be unforeseen expenses - and they are HUGE with apartment buildings.

My main questions would be on whether anyone has had any experience with these types of projects, and if so were there any pitfalls or unforeseen difficulties you faced in the process (this would apply to both multifamily construction or modular home construction in general).

.- Despite the goal of not leaving cash in deals, you'll have a hard time responsibly closing on deals if you don't have cash in the bank (closing costs, inspections during due diligence, paying contractors after you close, dealing with unforeseen problems).

Lastly, while I definitely agree with your points on having more capital up front to handle various costs in regards to the HML and unforeseen circumstances, I disagree with the fact that you shouldn’t learn on the go (especially being young and taking on only one project).

Well, due to some unforeseen events, we've been living on our cash flow for a few years now and have no W2 income.

The profit margin should provide a reasonable return on investment and account for unforeseen circumstances that may affect the project's profitability.

For those who love information.12 unit Building490k Purchase priceLoan 392K3 year ARM @ 4.75% = $2,235 / month5 year ARM @ 5.25% = $2,349 / monthThe 3 year obviously has an advantage of $115 saved a month that I could use to help bulk of savings for any unforeseen event. 

I've seen many a commercial loan go sideways due to genuinely unforeseen circumstances.