I've seen too many people opting at "deals" under 1%--which leaves very little margin for vacancies, fix up, maintenance, capex, and unforeseen issues.  

Fees are also set to a schedule of functions in collections, maintenance, emergency repairs, paying contractors, ordering and inspecting repairs, evictions, advertising and unforeseen events.

I think that's a very good idea in case of unforeseen cost.jonathan

What can happen easily is that some "investor" dreams up some method or deal he can sell to a distressed owner and they end up out smarting themselves when the deal unwinds because of some unknown or unforeseen event.From the stand point of building equity, relying on appreciation, and usually cash flow from a rental, you're better off paying a lower but market rate interest and discounting the price. :)

You don’t want any unforeseen problems popping up.For the most part it looks like a good deal.

On top of that, what if for unforeseen reasons, you did have to use the funds and can't just put them back now that the interest is higher - now you've only added to your debt obligations and made your situation worse. 

I'm inclined to agree this John and Alex thought it may not be worth it unless you get a screaming deal, I have remodel a lot of old homes and the can turn out really nice but there is a lot of unforeseen issues that could come up.

That way you'll have the most coverage for unforeseen circumstances.

Could there be an unforeseen drop in rents, and what would be the impact on over-leveraged investors who have 50 units which originally cash flowed $100/month, but after a rent shock sets the investor back $100/month instead?

However I don't see either being disastrous and barring unforeseen events (trade war with China, cold war round 2, terrorism, etc.)