I also think it matters how many you have, if you have one property you need more reserves than if you have 100 properties.  10K a house cited above might be about right for a person with 1-5 units but if you have 100 units setting a million bucks in reserve accounts is probably excessive, since its unlikely all 100 units will have a problem at the same time.

People are losing money in booms and busts if you buy badly enough. 

I guess for me it would depend on how much I would lose in quick sale now. 

I’m so relieved.As a landlord, it’s better to swallow your pride and settle for a small loss than try to go through an ugly eviction process for weeks or months and end up losing thousands of dollars on legal fees, lost rent and rehab fees.

Should I take this excess cash and pay this down to get rid of that monthly payment or should I put it into consolidate it with the rest of my RE investing stash and move on to my next building?  

We’re working on maxing our both our 401k contributions while also saving for rentals...once the 401ks contributions are maxed then all our excess gap will go into real estate.

Sometimes they will take the loss or whatever excess proceeds there are beyond the 1st.In this example, if the 1st is owed $33k and the 2nd is owed $37k and the property sells for $60k at auction, then the 1st will be made whole at $33k plus foreclosing costs and then the 2nd gets whatever's left.

This is a point at which your tenants will probably either gain or lose a lot of respect for you depending on how it's handled.

-I want to look back and say 2018 is when I changed my life.I'm just sharing so I don't lose the motivation over the next year or two.So far I've just been saving for the wedding not investing yet.

You run the risk of losing them as tenants -- Consider, if they leave -- how easily and quickly can you replace them with market rate tenants?