I wonder how many people don't even budget for reserves and consider cashflow = rent-piti?

Do you have written (email / text) confirmation from them that they are moving out? 

Like @Tim Herman pointed out, you better be ready with cash reserves if something goes wrong! 

The answer depends on so many factors including but not limited to: age, risk tolerance, job type, job income, job stability, long-term goals, education, type of market you will invest in, current savings rate, cash reserves, etc, etc. 

They then ordered an appraisal (at my cost) to confirm before removing the PMI.

I have seen pictures of the meetings on Facebook so I can confirm that there was one at least September of last year.

@Christa S Rickard I'm sure you could operate at 21% but it suggests that you are on auto-pilot...letting the roof rot of the place with insufficient reserves...I'd like to take a look at the actual property performance if you're inclined to send it over...

Just make sure it is very professionally structured - not to high LTV, good cash flow, have enough reserves and sign a promissory note and mortgage recorded with the County.

I would just double check your due diligence, and keep reserves if it goes vacant.

Also, I would suggest saving up some reserves.