The conservative approach Joe laid out for you or the more agrressive cash-out refi approach.There isn't necessarily a cut and dry right way to do it, but rather it depends on your individual goals and risk tolerance.

We are analyzing deals and getting feel for market and our risk tolerance.

There is zero tolerance for any emotion in business.

I give zero tolerance for ineptitude from contractors.

At the end of the day, it all comes down to the numbers and your risk tolerance.

3) Zero Tolerance.  

I've seen both higher and lower, really depends on the particulars and your individual risk tolerances.

As long as your tolerance for shady people is high I see huge potential!

To make this search more accurate, I'm trying build my own risk tolerance profile and then search & filter properties based on my acceptable risk level. 

If they're upside down, the investor will evaluate their risk tolerance and determine if it's a deal worth saving or passing on.