I want some cushion for the unexpected.

The biggest issue is that this is the riskiest of all the real estate strategies (opportunistic) even for very experienced operators, because of all the unexpected and unforeseen things that can go wrong.

That roof was a large, unexpected issue.

It seems that each month we pay out more than we take in for rehabbing, repairs and unexpected costs.

Real estate really did change my life and I no longer fear the unexpected challenges.

A sale would mean our buyer could re-sell at any time, which means we would run the risk of having to pay the capital gains tax at an unexpected time.

In other words, how much cash should you keep on hand to cover known short-term needs ("working capital") and unexpected emergencies where you have to come up with a lot of cash in a hurry ("contingency reserves")?

Usually,   in a cosmetic flip, you expect to not having to deal with major issues/costs, it should be a fairly easy rehab, and your margins might not have room for an unexpected expense an inspector should catch (defective electrical, plumbing, roof, HVAC, etc.).

We just replaced the entire electrical with brand new wiring, outlets, switches, breaker panel, etc. in one of our properties (3/2 SFH) in South LA. 

Maybe I was just feeling sorry for myself, or maybe I just needed to see it laid out in front of me, or maybe it was just another unexpected hoop I have to jump through.