I think that in order to feel confident about investing I need to spend about 4 months paying off debts (credit cards, cars) before I can reasonably allocate money to investing.

I am hoping to have a property under contract in the coming weeks out-of-state and just trying to plan for how I need to allocate my current cash reserves in a way that will allow me to purchase the next property next quarter but still be covered for the unexpected. 

Kinda piggy backing off of @Brian Burke's line of thought that you can always invest in the stock market and pull your cash out later.I look at most portfolio allocation decisions like this from the perspective of 1) Goals, 2) yield, 3) Risk 1) will not having enough dry powder available keep you from meeting your over all financial goals? 

Considering you need to allocate costs according to whether it’s your space, shared space, or tenant space.

But this is not a specific requirement.You can allocate the proceeds however you want in the purchases.  

Search the forums for lots of discussion on the topic.But, to be succinct, imagine buying a $1M fourplex that generates $8500/m in gross income.Now, make a spreadsheet to figure out what each of the following could be:"Cash Flow" - The amount of money left in your bank account at the end of the month (ignoring reserves and non-recurring expenses)Free Cash Flow - The amount of money you can count on at the end of the year (allocating $ for reserves, vacancy, etc)Total Return - The amount that your net worth will increase by holding the investment (includes free cash flow + gains from paying down mortgage principal)Total Projected Return - The amount that your net worth will increase, based on market projections (includes projected gains/losses due to housing market price changes, development/value add for the property, or changes in CAP rate).IRR - Wrap it all up for the expected length of time you'll hold the property to see how it'll perform overall and to compare it to properties in other locales.Now, adjust all those for your personal tax situation to figure out whether it's a good investment for you.For San Diego, you should be able to look at different situations to see why it makes sense for some people to invest there.I haven't yet seen broad agreement on exactly what to call each of those terms *for REI* - there's a difference in terms that real estate finance pros use vs. how us mere mortals speak.  

After some searching I think I found I found a possible deal for a buy and hold property, my analysis is belowFinancing80.00%Purchase Price$80,000.00Down Payment$16,000.0020.00%Total Loan Amount$64,000.00Interest Rate4.50%Loan Term36030Vacancy Rate10%Management Rate8%Principle and Interest$323.07PMI$0.000.00%Total Monthly Payment$323.07$3,876.81IncomeMonthlyAnnualGross Income 950.00 11,400.00ExpensesMonthlyAnnualTaxes$65.25$783.00Insurance$62.50$750.00Water$0.00$0.00Trash$0.00$0.00HOA$0.00$0.00Management Fee$76.00$912.00Vacancy & Collections$95.00$1,140.00Initial Repairs and Rehab$0.00$0.00Monthly Repair Allocation$95.00$1,140.00Lawn Care$0.00$0.00Initial Tenant Placement Fee$0.00$0.00Total Operating Expense$393.75$4,725.00Net Operating Income 556.25 6,675.00Less: Debt Service$323.07$3,876.81Before Tax Cash Flow$233.18$2,798.19Cash on Cash Return17.49%Gross Rental Yield14.25%Cap Rate8.34%I went and saw the property today and it is currently occupied by a tenant until next July paying $950 a month.

So that 5% you allocate toward maintenance on a 900/mo rental (which is 45/mo) is only $27/mo at the $550 rent range.

My first thought is to open a checking account for rents paid and multiple savings accounts to allocate a percentage of the rents to for expenses i.e. 

If you look at margins nationwide California,Parts of Florida,New York,etc. are all speculative.I remember a 4 or 5 years back in Miami there would be only so many condos being built and sold in a development.The investors would pay a homeless person (no joke) 100 bucks a day to stay in the line for them.They would buy up units and then immediately maybe in 1 to 2 months flip them for almost double.The markets were totally crazy then.Same stuff in Cali where brokers were telling me trailers were going for 750,000.So some of these investors that bought and made a ton along with foreign investors are ready to play the speculation game.They are not really in it for the cash flow.They already have a nice portfolio and chunks of cash to allocate funds to speculative investments and if they don't all margin out they will be fine.Speculating is fine if you have the money to lose and still be flush with cash.So these speculative markets have very wild swings in values.First to tank down hard and first usually to start going back up.In Georgia we have more moderate peaks and dips.So with some appreciation back but not huge swings in the future you need the cash flow as part of the deal.I don't like speculation just the hard numbers.I will speculate to a degree on land for future commercial development but I won't buy a house that loses money every month just on the potential of appreciation in the future.