I agree with all 3 of the points Dave makes.If I remember correctly, the point of view Dave's referring to is one of market characteristics buffering the many other risks.

I worked out some deed restrictions for the trees to provide a nice buffer between my lots and theirs but then they starting hammering we had to many lots ( even though we were within the code)  planning commission bowed to the public cut my lots by 20% my seller would not lower price and we walked  I LOST 80k on that one ( all the engineering i had to do up front)Seller was a well known doctor in town he was not happy what the neighbors did and since the property was in the county and this is Oregon..

I still think you should factor for management, just as an extra buffer.

Do you have equity in the properties to buffer against a turn in the market?

Love the construction contingency take away -- and then using this added buffer to back into your offer price. 

Your buying pool is larger and financing is easier (That means your money gets rinsed and repeated more often) This is how I protect my private financing when they finance 100%Purchase Price: 110kAs-Is Value: 145k (35k buffer for lender)ARV: 185k (Low value)Rehab: 21kClosing Costs: 6k Total Investment: 136k (Remember this lender still isn't in over the as-is value, but is a little over the 70% rule.

There is nothing to act as a buffer in the deal - 160 k purchase , 40 k renovation - 200k ARV , there is no way anyone can even break even in this .

I have no buffer, they live on the same property and until I discover a better way of seeing red flags earlier i may bow out.

The property is owned free and clear and my cash flow is $1300 month after taxes, insurance, Hoa dues, and a small buffer for maintenance. 5 years ago I rented this for $2100 month.

They can tell you about other issues and be a buffer.