This is a great achievement and shows that you have taken the important step of planning for unexpected expenses or income disruptions.When it comes to increasing your cash flow and decreasing the amount going into reserves, there are a few things to consider.

-Contingency planning: Have a plan in place for unexpected events such as a natural disaster, vacancy, or loss of income.

Tiled over the bathtub--WOW....That kind of behavior makes me wonder what other (hidden) goodies have been done to the place.Removed the furnace heat exchanger for who knows what reason.Rewired all of the electrical outlets backwards for the same reason.That tub thing might just be the tip of the iceberg, and (seriously) maybe there is a (decedent) under there?

what I could not understand is how I could get these 3P appraisal values yet when I ended up owning the asset I could not sell for anywhere near the appraisal value regardless if I went in and did a full rehab which I did to the tune of millions of dollars.The reality was without a highly tuned and financed resale outlet like a turn key company the appraisals were in fact meaningless to me personally. 

If you need to draw for unexpected capex expenditures or cover part of your downpayment as a bridge until you sell or refi, this is a convenient way to manage working capital.3.

I have a connection that may be able to help you out. Let

There are pitfalls and assumptions with these calculations so be wary.You can also add in scenario analysis to estimate worst case (e.g. unexpected cap ex) and best case (e.g. forget best case because it probably won't happen) scenarios.

The worst thing that can happen to us newbies is one bad hit from an un-calculated/un-expected capex expense that destroys a year or more of cashflow.

I just bought a nice 12x18 porcelain tile for a smaller bathroom at an outlet supply house for $.99 a SF.  

I think the new roof and furnace are capital improvements, but what about paint, drywall, electric outlets, PEX pipe repairs, and step repairs?