What are their current reserves (I believe 3-6 months of operating expenses is considered “healthy” for reserves.

Tenants have certain formulas for rent to sales ratios to be healthy.   

This is why it's good to have a healthy cash flow. 

"Go to war on your mortgage"   Use tenant rents and the healthy income you will receive from medical sales to knock that mortgage down.  

Mold exposure generally doesn't kill, but will make people sick...In 2004 the Institute of Medicine (IOM) found there was sufficient evidence to link indoor exposure to mold with upper respiratory tract symptoms, cough, and wheeze in otherwise healthy people; with asthma symptoms in people with asthma; and with hypersensitivity pneumonitis in individuals susceptible to that immune-mediated conditionLead exposure generally doesn't kill either, it just causes brain damage and other fun things to happen...The signs and symptoms of lead poisoning in children may include: Developmental delayLearning difficultiesIrritabilityLoss of appetiteWeight lossSluggishness and fatigueAbdominal painVomitingConstipationHearing lossBabies who are exposed to lead before birth may experience: Learning difficultiesSlowed growthAlthough children are primarily at risk, lead poisoning is also dangerous for adults.

Here in Clarksville, TN, where I manage properties, we have a very healthy balance of cash flow and appreciation.

If they are chewing on 2x4s in the wall, keep tearing off drywall until you see clean healthy wood.

My approach was/is as follows:Buy solid properties in good areas.I would put as much cash down as needed to ensure a positive cash flow.I wanted to buy the property and then have it pay for itself no matter what.That means having a healthy cash flow "on paper" so that when Murphy shows up, I don't have to panic and come out of pocket for expenses.If some cases, this meant 30% down in others it was 50% down.I know that's not sexy, it is not some slick house hack.But it is solid, time tested and proven.In doing so, I never had to worry about the property.I made the investment put enough cash down to provide a solid excess to pay for the unexpected.And then I let the market, time, mortgage paydown, and inflation do its thing.

We do raise a healthy population of termites and about half the properties will need to be treated for termites, rarely have they done any damage and the treatment for most rentals is less than $500 total.Phoenix has all of the major sporting events, tons of recreation, a major university and land to grow!

However, given the "shadow inventory", it'll be a while before SFH is healthy nationwide.