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.

[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.

Allocate $50,000 to start up your flipping business.  

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

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)..

My initial generic and woefully inadequate definition of investor is 'someone or something that 'puts resources (financial or non-financial) "in play" (allocates resources) for an anticipated gain.'

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.  

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

I've allocated approximately $25,000 to invest in my budget for a conventional mortgage. 

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.