With the house hack and baby you may need the extra cushion in the bank.

You need to have emergency savings and a maintenance reserves...I suspect if you are having trouble building the 3% then you may not have those important cushions in place.

Also to buy only properties where I can add value and/or have built-in equity as a bit of a cushion for if/when the market takes a dip.It’s not that I’m expecting to sell anytime soon, but I’d like to have the option to sell and the extra equity created allows me to do that.Finally keeping plenty of cash reserves and sources of capital open (lines of credit, private money).

Just figure on building in an extra cushion on whatever the project is. 

If we did sell, we would look to reinvest down the line, after paying some bills and keeping some in flexible savings. it’s very tempting with the market to cut and run and be able to pay some debt as well as a cushion to reinvest. 

If you repair wisely and the ARV rises enough, you will end up with a nice little cushion after the balloon that may pay you back for the interest and points on the HML.  

I always up the rate for a conventional loan to provide a bit of a cushion knowing I'll be sub 5%.

If it does work, then you will be pleasantly surprised and have a little extra cushion for your rehab budget. 

This will you leave a bigger cushion and better cash flow.

However if you can a get a house for 70% off or so, that will leave you a good cushion.