If the health department calls, we jump and correct immediately.  

Anish, that is the point of this - to illustrate that it is not cashflow if you are not properly allocating reserves.  

It's one thing to default when circumstances are beyond your control:  Health issues, lost job, etc. 

The home health aid married him, ran up all his credit cards, deeded the two houses over to her son in the few months before the old man died so there would be no estate or will to his kids or grand kids.

Is there any kitchen facility, health code compliance requirements?

I was just illustrating with simple back of the envelope calculations.

As a side note, I'm a practicing actuary in the health insurance field and worked for a P&C insurer in college.

It sounds like when it presented itself, they did exactly what any good company would do - they did the right thing.For all of the readers on here, Mikes' story illustrates some great points.  

If tenant is credit investment grade BBB- or better than Standard and Poor's is analyzing them constantly for debt load obligations versus liquidity on the balance sheet to see how healthy they are.Also even if not in lease sometimes with stock reporting you can get the financials you need.Tenants do not like reporting too frequently as it can increase their bookkeeping hours expenses.If tenant is not investment grade I want everything I can get on them to constantly monitor the health of the business.

My 2 1/2 year old son has been with me for every bit of work I've done that would not be hazardous to his health.