You say 7 months reserves but is it really?

Should we wait until we have some cash reserves we have saved for down payments and are settled in the same area?

Being their son-in-law, I have some reservation in telling them how they should set up their will, but I will try to address some of the issues with them. 

I’d assume that if you’re asking for that you also have great credit, great reserves, and a substantial net worth.

Being that we have renters lined up already, do we need to have 12 months reserve for either or both of the homes?

@Brent Coombs  good points in my BRRR days when I was HML to CA buyers who were then BRRR and taking 10 to 20k cash out refis in 90 days of owning the home and retiring my HML ( loved it from my perspective LOL)  the investors would get this money and you would think they would pop It into their reserve accounts.. but I suspect many a boat... .exotic travel they they deserved, new car, clothes Jewerly etc etc was purchase with these funds... lack of reserves kills investors... this is a classic example

I cant even let my husband know he did this to us.PROFIT SHARE FOR 2409 RUTH FITZGERALD PLAINFIELDDateDebitCreditMemo8/14/2015$2,000.00Down Payment from tenant-buyer, Everardo Paniagua8/21/2015$3,600.00$2,000 is NROC fee; $1,600 is the first month's rent8/14/2015$460.00Plumbing services8/17/2015$47.63Menard8/17/2015$190.00Lawn mowing and gutter cleaning8/19/2015$100.65Home Depot9/9/2015 $ 965.38 Mortgage Payment for the month of September9/10/2015 $ 173.26 rehab costs9/17/2015 $ 181.39 Commission paid to Marketing & Sales9/17/2015 $ 362.78 Commission paid to Acquisition and Proj Mgmt9/17/2015 $ 24.28 Nicor gas - utility expense9/18/2015 $ 177.00 plumbing bill9/27/2015 $ 42.47 water bill utility expense10/1/2015 $ 965.38 mortgage for October10/2/2015 $ 3,998.05 downpayment received from Paniaguas through Rentshare.com10/5/2015 $ 1,598.05 rent received $1600 minus $1.95 fee charged by rentshare.com $ 435.00 furnace repair10/27/2015 $ 965.38 mortgage for November11/4/2015 $ 1,598.05 rent received $1600 minus $1.95 fee charged by rentshare.com11/11/2015 $ 300.00 replace windows (rehab)11/12/2015 $ 382.77 cashflow profit share to Wendell11/12/2015 $ 189.80 commission to Marketing & Sales11/12/2015 $ 379.60 commission to Acquisition & Project Management11/25/2015 $ 965.38 mortgage for December12/5/2015 $ 1,598.05 rent received $1600 minus $1.95 fee charged by rentshare.com  Totals $14,392.20$7,308.15 Gross Profit $ 7,084.05 Reserves $(5,000.00) (we keep this reserves to offset cost of possible vacancies $ 2,084.05 Profit for Distribution x 25% profit $ 521.01 check mailed 12/19/2015 to Christine

Correct me if I'm wrong, but if you have done a decent amount of due diligence and have enough reserves in the bank, then you're rarely going to be negative on flips and if so, nothing significant. 

We set aside all positive cash flows until we have a predetermined amount of reserve.

Build some reserves up and then look at your options.