It doesn't guarantee their income is sufficient, but what I've found being in this business for almost 15 years is that most of my evictions have involved someone with income less than 3x the minimum.It is good to consider the reason WHY this rule is what it is:The majority of rentals in my medium size Midwestern town (Springfield, MO, population 160,000) are between $500 - $1200 per month, meaning most renters need a household income between $1,500 - $3,600 or greater, depending on the Class, location, etc. of the rental.  

We've managed to purchase a couple of rental properties and currently carry what we feel is sufficient insurance on these properties. we are also in process of creating a trust so that should anything happen to either of us (Wife and I), we won't have to worry about where the houses will go. with that said, Do we necessarily need to create and LLC first to transfer the properties into before finally transfering ownership of the LLC to a trust?

@John Liaaz There are many real estate strategies to generate cash flow, but your calculations are correct.It takes time and effort to build up a portfolio that provides sufficient cash flow to live.

It is important to have sufficient cash on hand for covering these events.7.

Michael,Your 10% might be sufficient, but in this case there shouldn't really be any reasons not to use accurate numbers based on your communication with the management company.

If rear  of house only replacing the 2 might  be sufficient. 

As has been said many times here, usually a sufficiently high umbrella (liability) insurance policy (obviously in combination with underlying liability insurances for the properties) is usually much more useful if push comes to shove.Then again, there are many situations where an LLC makes sense or is even required (e.g. commercial lending).In any case, you need to contact a knowledgeable attorney who will be the only person able to give you proper advice for your individual situation (and especially state).

It's a place where someone else can be 'self sufficient' in a separate area of your home. 

I would suggest having 1 HELOC for operating during the purchase and rehab phases, but always do a full refinance when pulling the money back out to pay off that one HELOC.Granted this may not always be possible for the new investor being you have to have at least one property with sufficient equity to get the first HELOC up and running.  

My decision process is in this order:1: I ensure cash flow is sufficient to cover operating expenses, vacancy budget, cap ex budget, and has a higher cap rate than the mortgage.