For me, the risk is too high IMHO. 

However, being worried about finding a qualified tenant in the winter certainly wouldn't be an issue here... the demand for rentals is so high.

For sure there are some not so good areas in Lehigh but you can get a lot of return from you investment if you find the right one! 

Apparently our DTI is too high for the HELOC so we can do a cash out refi but that is less desirable because it means we cannot then get the loan for the rental property despite having 25% down.

High upfront cost.

Currently, we have them in a money market savings account, but I believe there are better options out there that offer higher returns while still being liquid and low-risk.I'd love to hear from other operators:Where do you park your reserve funds?

It depends on if you're an llc or not, it depends on what state you live in, it depends on if you're a single member llc or a multi member llc- ultimately the numbers flow on to your tax return- your 10:40.

The risk level is too high, I've been around the block a few times and I would most likely pass too.  

35-40% is a more standard realistic operating cost. 50% is too high.

Investing in Out-of-State Properties: Given the high property prices in Manhattan, I'm also exploring opportunities in other states.