I also think it matters how many you have, if you have one property you need more reserves than if you have 100 properties.  10K a house cited above might be about right for a person with 1-5 units but if you have 100 units setting a million bucks in reserve accounts is probably excessive, since its unlikely all 100 units will have a problem at the same time.

They also were meant to dry their clothes on hot in the dryer, and I didn’t see any laundry being carted to the laundromat, either.They were headed down the eviction road, I believe, but their decision not to stay due to rent increase probably made it much easier on me in the long run.

Should I take this excess cash and pay this down to get rid of that monthly payment or should I put it into consolidate it with the rest of my RE investing stash and move on to my next building?  

We’re working on maxing our both our 401k contributions while also saving for rentals...once the 401ks contributions are maxed then all our excess gap will go into real estate.

The problem of course is that the market is drying up a little bit right now.

Sometimes they will take the loss or whatever excess proceeds there are beyond the 1st.In this example, if the 1st is owed $33k and the 2nd is owed $37k and the property sells for $60k at auction, then the 1st will be made whole at $33k plus foreclosing costs and then the 2nd gets whatever's left.

Seems pretty cut and dry to me.

@Krishna Chava Thank you for your response I agree with you about most landlords but I am referring to more serious mold problems where all the dry wall needs to be removed and replaced in a room or two. 

The amount on the letter was higher than the sales price of the house. 2 days before closing (within the 25 days of backing out incase of financing not being approved) the buyers agent came back and canceled the contract, and provided a letter from the lender which stated 2 reasons for financing falling apart. 1) Insufficient income for amount of credit requested2) Excessive obligations in relation to incomeThe buyers agent also told my agent that apparently the buyers had purchased a car 3 months before they went in for qualification and the lender didn't find that account in their credit report and thus provided the pre-qual letter. 

Where I'm from the market is dry as hell. not interested in penny pinching ok deals.