It can never hurt to have a surplus of reserves.

No where near those returns...but VERY good for 4 years of holding and running cows on it.Very interesting call out Jay, takes some long-term thinking and surplus to invest, but depending on the property (especially ag with the low taxes) you can even make a little on it along the way. 

Even if you were in a 30% tax bracket and took no deductions, you still have a surplus of money each month after living expenses.

Is there surplus funds?

You now need to get a policy from a surplus lines carrier.

Keeping 20K - 30K in reserve that you can replenish with surplus employment income should get you through the vacancies and capitol expenses that come up like a new roof and renovations.Once you retire and all properties are paid off, assuming you have not gone bankrupt along the way, you can liquidate and live the good life.

The offset is that the better priced company rates may not be that much more for Replacement (RC) verse a lesser company (surplus or excess lines often) with Actual Cash Value (ACV).  

@Chris Serger Assuming what you say is true about the opening bid.....I don’t know the laws in that jurisdiction about who gets the overage from the sale....in your case you’re owed say $30k, if the bid is $78k, with say $3k in fees, then there will be $45k in surplus funds.Assuming informed bidders,If the surplus goes to the owner, then no one will bid since they’re paying $78k and also become responsible for the $50k first.If the surplus goes to the first mtg, then maybe people will bid, since they’d be all in for about $78k plus $5k  (the balance still remaining on the first), or $83k, if the property is worth $117k, as is.

Note, if the property has significant equity, an offer at the price it would sell for at auction gains the seller very little....they’ll get the surplus from the sale anyway.

You find a friend, family member or co-worker that has surplus capital they are willing to invest in real estate with you.