If my mortgage is 650 and my rental income is 1000, does that seem like enough cushion?

I think having that 401k and IRA Roth account grow along side of REI gives you cushion just in case REI doesn't work out and they also offer different tools/options for your portfolio.

I hold a cushion there for capex and whatever is left over I deposit to my brokerage account to invest for my next one.  

Cap rate is expressed as a percentage and determined by local market.VALUE = NOI/CAP RATESo for this deal and way before I even purchased the property, I knew the market, had a clear understanding of income potential and built extra cushion in for expenses in my underwriting analysis.My strategy for value add deals is I follow what I call the "Fabulous Four".I buy assets whereby the property has one or all of these core elements, the ability to:Increase RentsDecrease ExpensesIncrease OccupancyFix Deferred MaintenanceSummary, my team was able to increase rents by fixing deferred maintenance items.

Financially, it is doable but tight.I have considered doing an early withdrawal from my 401K which would give me significant cash and a safe cushion to start the business, especially with having a partner.However, I would be subject to 10% penalty, 25% federal, and 6% state tax, about 41%.Has anyone used 401K money to start, and how did you finance?

It provides a nice flat substrate and acts as an additional vapor barrier and even gives it more cushion.

I think as long as you expect to make some cash flow (after covering all of your expenses, your mortgage, your insurance and any management fees) off of each building that you acquire and keep a cash reserve of, say, $30-$40,000 as a rainy day fund, you'll likely have enough of a cushion to cover any unexpected expenses.

You have an investment for lets say $5M USD, she gives you all $7M to cushion you in case their are unexpected costs.

That gives you a really good safety cushion, and, of course, will color your decision of what is a good return on your money.But keep this is mind: deals are like taxis; if you miss one another will come along by and by.

I call it my Mike Tyson/MC Hammer principle.Have your friend build a month to month cushion and keep the money in the bank.