Jon made a great point that the 50% rule may over estimate expenses in the short run but it helps to cushion the blow of the big, infrequent expenses.

Now I estimated $100k in repair and remodeling costs but I didn't include the wise cushion of 10% most investors use as a cushion for unexpected problems that arise, and there could be unexpected problems that show up or problems getting the work done at the estimates given and the timetable given by the contractors.

(As evidenced by the 50% rule result)Keep in mind the more leveraged, the more critical it is that the underwriting is well researchedAlso, typically at 100% financing, there should be a pretty good cushion built into the deal.  

I liked it because it had a nice cushion layer on the bottom, was thick, and flexible.

Working on design for 1000 sqft home to get “exact” or ballpark for that including concrete around house and pergola in back… (adding cushion for unexpected costs)- what percentage would you say I should add for that? 

My deal didn't have a balloon, but it did have many of the same "what if's" that I listed in my earlier post.In my opinion, you must first plot out a reasonable cash flow that allows you a pretty comfortable cushion to deal with the balloon in 5 years.  

A little cushion over any immediate surprises if they come due more quickly than you expected..

All these things can be better managed on a level head- the way i accomplish this "level head" state of mind is to maintain a cushion of cash that reassures me i can take care of these unexpected realities if/when the arise.

.  :-( there is a happy medium we have been putting clients in this same stage of their investing life into mid term debt  first position at 50 to 65% ARV so plenty of equity cushion and returns would be triple what your talking about with very mitigated to limited risk of say HML to fix and flippers  See patch of lands foreclosure issues.. 

Include language in your lease saying that breaking the lease results in forfeiture of that, and you will have a cushion to pay for the vacancy and placing a new tenant.