I have enough cash for a sizable down payment, but I have a pending lawsuit on another business that I'm a partner in that I'm worried will scare off a regular bank. 

When February rolled around I received a regular invoice and the $120 was mysteriously missing yet again.

If you look at the housing affordability index for your neck of the woods, I bet you are not at the top of a regular housing market cycle yet. 

Hello Experts,I read alot and tried to get into foreclosures(in my area in Iowa) but found that alot of time/work/money/risk involved for a little or sometime may be descent money (if you are lucky or can sell it on the prices you expected initially) ... but I am not sure all this work is worth for what you are getting..I am in in a process of planning future and deciding the best route for investment option, basic goal is to get a regular monthly return/income while i can keep working on my current full time job, i can invest in either buying a multifamily/apartment building having 25+ units or buy a hotel/motel or buy a land and construct a apartment building(not sure if constructing a building would be bettor of buy an existing one).My target area would be 1.

As are almost if not all of the properties that we show investors who fly into Cleveland.Turnkey house, regular house, rental house whatever anybody wants to call it.

I grew up in Indy and get back there regularly.

I agree with Jon to a point, the reason you have reserves is to cover unexpected expenses and having 6 months PITI means you'll generally have the payment covered, the regular rent may cover more such as a minor repair and clean ups for that vacancy.Having additional properties and holding funds for all isn't really necessary as a slush or escrow fund as the chances of having extended vacancies or expenses in all your properties at the same time is pretty slim.You should have the deductible for your hazard policy as well, if you have an insured loss you'll need.You also need to consider your ability to access other funds, not just from you fund but total assets and the ability to borrow quickly.Jon's method is pretty safe, but as you add more properties you can fine tune funds held in reserve taking into consideration your abilities to cover a disaster. :)

But, alas, I suspect, no, I am certain you will come to see the money goes into the reserve account on a very regular basis and it comes out at irregular intervals and sometimes the amount coming out is staggering.

I try to only do one bigger project to help maintain a budget, but doing this as a regular practice has been very effective in improving the overall quality of my rental units as well as vastly reducing service related issues.As an example, a recent 1 BR we made ready to rent had an older multi-piece shower unit in a bathroom with older sheet vinyl flooring.

Guess that means I might be a regular at one local meeting.