If you are not enforcing your lease and maintaining strict standards to train tenants to your requirements your are an amateur that will eventually be reputedly burned. 

While I think it's wise to game this out, I would not make any plans based on permanently low interest rates and cap rates, since that's a sure fire way to get burned.  

To your point you can get burned very badly if you cannot afford to diversify, but that's what happens when you play with fire while chasing returns.

Also, not many designers over 40 years old, high burn out rate.

however the 5% allocation does easily cover the cost of rental income protection. 3. did you know that only 0.4% of all structures in the U.S. burn down - Yet EVERY ONE OF US has fire insurance.      

Obviously he has been burned.

You can also do a "burn down" of the security deposit.

Like I said I am new to this financing from a Flip/Reno side so I am looking for the best way to fund short term without getting burned on financing.  

DON'T USE THE "50-CENT" OUTLETS UNLESS YOU WANT YOUR HOUSE TO BURN DOWN! 

I've only had to replace the carpet in a couple bedrooms when there was a tear or burn that couldn't be replaced very easily.