Your insurance should cover rent loss even though you don't have flood insurance.

Your gain is someone else’s loss (in relative terms).

Imagine the protest if SBA-sponsored financing was channeled to one specific industry and experienced substantial losses.

If you or the market hits a rough spot, and you are forced to sell at a loss (bring cash to the closing or short sale) or give the property back to the bank (foreclosure or DIL), you WERE "over leveraged" ... figuring that out before that happens is the trick :) And no, cash flow alone can't always prevent such an occurrence ... cash flow can dry up in an instant ... it can normally get restarted provided your initial projections were not that far off or too tight (which they are in the OP's case IMO), but how long and how much money it takes to get it flowing again is a tough thing to answer ahead of time.

Maybe cut your losses, negotiate with them to reimburse the last few months, and move on. 

Also do an insurance loss run and make sure your insurance won't be 3x the existing policy.

I did file a Schedule E this past year, but I reported a loss because of inherited vacancies and repairs needed.  

I am working with a few local gurus in my current city but as i just found this deal tonight i have not had the chance to talk to them about it.My Cost Analysis: Monthly Operating Income Scenario A Number of Units 2 Average Monthly Rent per Unit 1,400.00 Total Rental Income 2,800.00 % Vacancy and Credit Losses 10.00% Total Vacancy Loss 10.00 Other Monthly Income (laundry, vending, parking, etc

Saving 5% losing 10% net loss of 5%.

There's no reason to take a loss.