Wholesaling is a great way to build a large cash cushion......of course you also need to have several houses in your buy and hold portfolio, which you never sell.

Do you generally keep a cushion of cash in the savings account just in case?

And to avoid too many sleepless nights, be sure to have a cushion of cash when you are ready to take the plunge.

. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ http://www.iht.com/articles/2008/09/07/business/fannie.php The U.S. government's planned takeover of Fannie Mae and Freddie Mac came together hurriedly after advisers poring over the companies' books for the Treasury Department concluded that Freddie's accounting methods had overstated its capital cushion, according to regulatory officials briefed on the matter.

That way if they try any "keep my deposit for the last month's rent" shenanigans I've got a bit of cushion.

Just keep in mind the bigger the building, the bigger the cushion needed.

I personally would not do a deal like that, as my return is reduced dramatically and my cushion is absent.The income vs. value approach you mentioned is not only valid, but the exact reason for the dramatic bubble burst here in CA.

I suggest that the cap rate that you use be at least 2 points higher than your expected interest rate (blended or otherwise) because this provides a cushion considering financing and other factors.

The key is to buy right, manage properly, and to not over-leverage. 30% down is a very, very safe play, especially when you buy at a discount giving you even more of a cushion.

You should expect that you may have to take a little less, but there seems to be some cushion room there.What is a "leapfrog" property?