But what happens when there's an unexpected roof leak or the furnace breaks down?

So the dog might be prone to accidents in the house.

Sharad, was the plumbing issue something that was overlooked during an initial inspection or was it known and only the 4-6 week wait the unexpected problem?

But is that person taking into consideration a broken water heater, or a new toilet, or a long term vacancy or squatter or other unexpected expenses that will come along?

If you drive 3 miles an hour over the limit the cop may let you go, you drive 100 miles an hour and cause an accident with property damage, injury or death, you'll be paying dearly.

Just by accident, SAME inspector was hired by a DIFFERENT buyer to inspect same house.

But good way to have that in reserve for any unexpected expenses.

Half way into building both of the extended family members unexpectedly died just days apart from each other.

With fix&flips you are correct that it does have quicker profit but can involve higher unexpected renovation expense, additional holding cost, and higher tax collection so in order to do this is research properties carefully and have a good cpa. 

If they can give me a reasonable explanation (medical problem, job loss, car accident, etc) I don't worry too much.