It is not really my intent to change the direction of this thread, but I probably will by asking the following simply because, though I have followed the market loosely for several years, I am not especially active or an expert: what makes you so sure that this is a bubble?

If they get loose, they will chew.

I definitely want to have adequat reserves I'm all about that and that's why I want to know what's a good conservative amount without going overboard and loosing possible money that could go to deals.Is there a good technical book about the Cash flow buy and hold stratagy? 

This will tie-up the loose ends.The part everyone cares about, the money shot...Apprisal $148,000I was able to get out 77%. 

If your goal is to free up the unit, clean it up and rent for higher, then go for it, nothing to loose.

If you give an inch, they will take a mile and you will loose money, lots of money.The rental business is a rough business. 

I also probably pay a lot higher interest rate then you do and some of my creative financing methods keep me up very late because I have to juggle where my money is or have the possibility of loosing my house to an investor that lent me money on strict terms.

If one day I'm unfortunate enough to loose it all to a lawsuit, I'll sleep just fine knowing that I have more knowledge now and will be able to earn it faster the second go around.I know plenty of folks who have made small fortunes in real estate that couldn't tell you what an LLC is.  

If you need permits to do the gut you could loose your grandfathered in zoning.  

I sometimes give people a last chance after we had a come to jesus meeting - in this case, it would tell him, look this is not working, i am loosing money every week and you are responsible for those losses.