In a cyclical market, real estate asset values can also correct, but cash flow can offset dips in market value and help you budget for unexpected expenses.

More likely is that you might get hit with up to $2k in unexpected costs now and then, keep some funds liquid.  

I leave the unexpected big things for a credit card.

HI there,I have a tenant who unexpectedly sent me the next three rent payments with post dated checks.

Cash reserves to cover the unexpected?

I actually don't think that a 40% labor cost is too awful for the first few months, obviously you can't stay there for the long term and make money, but my theory was always to have some extra labor around until you really get to know when your rushes will exactly be coming and to help deal with the inevitable unexpected surprises that will always pop up when starting up a new place.

You need to see if any large expenses come unexpectedly (and they do!). 

All unexpected. 2) Not having a very clear, defined plan/schedule for rehab.  

The husband died last month unexpectedly.

It wasn't so much designed for the expected expenses, property taxes, insurance, etc but for the bigger unexpected ones.