In the end, look at the pros and cons on your side and have enough in reserves if you need to pay the mortgage for a few months without a tenant...and for any other unforeseen issues with the property.  

I must warn that is not as easy as most people think because even hard money lenders (asset base lenders) want to see some cash reserve in your bank account just in case you run into some unforeseen issue.Goodluck

Their fees and interest will gobble profit quickly, especially if you run into unforeseen problems on a flip.I live in the Denver market, and it's crazy here.

How much is a good amount of $ to have for a 1st purchase (taking into acct, extra unforeseen expenses).

Flipping houses is riskier because of rehab estimates, the actual rehab, unforeseen issues, etc.

Just trying to tidy this piece up a bit without creating some unforeseen liability in the process 

Be wary of the gross #'s and make sure you account for the unforeseen and typically unaccounted for expenses in those areas.

We've never had a tenant go to an attorney to draft a letter to us about quality of life and dissatisfaction about living in one of our properties.The best protection is to make sure you are always in compliance with landlord-tenant law and non-discrimination laws for your jurisdiction, follow the terms of the rental agreement, maintain habitable abodes, and do what you can to make sure there are no unaddressed hazards or safety issues.When unforeseen problems occur, such as the HVAC system breaking down, plumbing problems, pest invasion, etc... the minute you become aware of the problem, then do what you need to do to fix the problem in a timely manner.

I have an Overuse of Utilities clause in my lease agreement specifically for this unforeseen situation.

Had he stayed on track, I don't think he'd be dipping into hard money or secondary lenders.Although, maybe I'll qualify my earlier statement by saying something unforeseen occurred causing his friend to expend more funds than he was scheduled to.