Or am I right and I just need to allocate based on my understanding?  

The 28% actually represents the percentage of the rent that is left over after allocating 72% of the monthly rent for expenses. 

If so, you'll probably need to set up an escrow account and allocate a portion of the rent towards the monthly, quarterly, semi-annual or annual premiums when they come due.

Well Robin (LOL), your equity has all ready been allocated since you don't have it until the deal is taken and done, otherwise it's cash waiting to be used and yes, that has a cost, financially and economically.

Hard money loans are worth looking at for sure, but it would be hard to know the proper asset allocation without knowing your time horizon and tolerance for risk.  

@Maurice J.To insure your numbers are sound, I'd ask the following:How much contingency $ do you have allocated for renovation?

This secondary custodian, allows you to "Self Direct" your IRA funds.Here is one of the secrets...some accounts like Health Savings and Education Accounts  have additional taxes benefits.l, but they still act the same as and IRA, the fund allocated and/or contributed can be used for real estate investing.Again, I'm now expert check everything with your custodian.

[off topic background]As a programmer, we sometime 'optimize' systems by the on-demand requirements.that means, do nothing UNTIL it is required[returning to the topic]In REI, where vacancies are low and long intervals between, we can 'cheat' ourselves by fixed allocations for these items, year on year and could have easily banked these values.Yes, funds will have accrued to cover 99% of the issues, but a fixed Reserves account will easily cover current needs.EVERY investor needs to evaluate the question and develop an approach to the move-out problem.

One way around this situation may be to create a condominium in which each SFR is its own unit and the ownership of the land is in common, but you can still allocate limited use common areas to each unit.

That 550 in rent, I am guessing, gets dissolved away quickly with the mortgage, insurance, taxes, and allocations for these other items, diminishing your returns..Also, see if that is market rent or if similar units in the area may go for a bit more (or less)..