I was actually calculating maintenance and capex in my original equation too, but just for the sake of argument let's say there's an additional unexpected 100K capex cost somewhere along the way, and let's also assume there is awful appreciation of only 1%/year, and rents rise only 2%/year, while all of my costs follow inflation at 2%/year (That's pretty bad!) 

I can't afford to take on the risk that my sub will have an accident and WE won't have any recourse if they are uninsured.So yes, repairs will likely cost more.

But you don’t want a single accident to wipe out your life savings.

An unexpected read that really stuck with me and continues to produce positive change in my life is Chris Bosh's new book, Letters to A Young Athlete.

If you end up going over budget on the rehab (VERY common), you will need to fund that out of pocket.The danger of not having enough of your own cash is that you end up with unexpected costs you cannot cover and you lose the deal.

I'd rather toss 5k in my bank account for buffer against an unexpected problem.

And being free to take on unexpected things that come up really will save you time (and money) in the long run.Best of luck to you!!!

One of the leading causes why people go into debt is because something "unexpected" occurs so they charge that "unexpected bill" to their credit cards.  

Repairs were estimated at $37K but we ended up with $50K due to unexpected air conditioner issues plus a few misc things. 

All choose however, to leverage themselves into five or six deals at once, or more in a few cases, and leave a bit of cash aside for the unexpected.