Of course if you are required to pay off the 2% mortgage then your cash on cash ROI goes way down, but with a 30% equity cushion you’re still way ahead.I really dislike contractor for deed, lease option, or not recording warranty deed as “solutions” for the due on sale clause.  

HOWEVER, (a) many people would rather preserve their checking account "cushion" instead of having it applied to the mortgage where it cannot be "retrieved" if needed later.

There aren't too many areas other than HCOLs that support current rates in terms of debt service, so I would run the numbers with a generous ~15% cushion. 

Since I have a family, a career, and a low risk tolerance, I consider this my safety cushion, to where I can sell any of my investments and still recoup my down payment.

Have a huge cushion and don't get too excited as not everything is what it seems.

We chose to leave $25,000 invested as a bit of cushion until the restaurant has completed their renovations.Lessons learned?

Equity and cash flow are equally important when deciding whether to pull money out.If you can put the equity to work by adding another property while still having a nice cushion on your cash flow, then I would say definitely yes.  

Yes, it may need repairs, but I would have a $20k+ cushion for repairs in reserves.

But the risk caused by this, is that the safety cushion is reduced or completely eliminated, and a small problem can cause a catastrophic default on the debt.So, many of these aggressively structured deals have been heavily distressed.

You could take $30k plus closing and buy a $120k property that cashflows nicely, and still have some cash left over as a cushion.