One oh-$hit during rehab can eat into that very quickly.

If you want to talk risk, put down the PE talk for a second and look at commercial real estate, inflation, higher defaults, forever wars, growing china dependence and the economy and tell me that real estate would not be effected equally across the entire board when the house of cards fall, yet dividen stocks (this is a fact) tend to out perform the rest of the market due to hardships not really keeping people from drinking coke and eating at fast food chains.

Your brain will eventually tune out the smell after a day or two - not a game changer for most, but the brain eating amoeba in the lake was, and I know many who now swear to never swim/boat/ski there again. 

Because that mortgage payment will eat up almost 70% of all your available income.

As a lender, we require flood insurance if the property is in a flood zone, which can eat into your cash flow if you want to hold the deal. 

These could even be in a market where values are appreciating quickly. if you get caught at the top of the market, have an event happen that eats into your reserves, get a bad tenant, or just about any other event could take you down.  

Do you all follow this if you accept both, or just eat the CC fee?

The only downside that I am experiencing is that the PM I have takes 30% off the top, so having different houses in different markets means lots of fees eating into my profit.

I think the lender will probably require it I would be shocked if they dont.Also as you mention HML can really eat you up especially the rates in NJ PA and NY not so bad west coast were experienced folks can get 1 and 7 and only pay on drawn funds.. 

You can't eat equity and as much as you'd like to keep them it sounds like it'd be more beneficial for you to have some extra cash on hand.