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. 

It is embarrassing how these people teach complete horse crap and people like you EAT-It-UP!

We really need to make sure the second deal is a smart one as it will eat up most of our reserves. 

The ENTIRE mentality here is wrong.Listen carefully and hoe you and everyone else here understands this.Consider this.I have 15 kids, 4 dogs, 300 chickens, 3 wifes (that don't know about eachother), an uber eats job, and 35 dollars to my name.

Condos and townhomes are nice but HOA fees eat into your profit. 

There will be tenant turnover, which will eat into returns."

I have zero experience, but my wife and I eat out a lot???"

Be wary of hard money loans; they can be pricey, often around 12% interest for newer, which can quickly eat into your profits and also require a high down payment.

We require all tenants to add us as "additional interest" on their policies, so we know when policies have been cancelled, but if a tenant chooses to violate the lease and not carry insurance they can eat the costs of their belongings if something happens.