My issue was that on top of the the money I put down, the 2 points up front and all the other excessive closing costs that HM comes with I now had to come up with an additional $22k(or a portion of) to get the rehab started.

On another note, even if they have excess funds for a project, it does not mean that they are willing to spend their maximum budget, they usually think that if they spend less, they earn more, usually contractors get the short end of that stick.

I don't think the HOA board is particularly interested in kicking my tenants out to the curb or fining me $100 per day, they want to get rid of excessive rental units in that community. 

@Michael Plante fair statement, but all proposals now on the table are far in excess of what I am looking to do.

In this way, I view the excess equity as an insurance policy in the beginning.3)Your property value will go up after you fix it and stabilize ... refinancing then allows you to pull most or all of your initial investment out if you like, and possibly with better financing terms since the property is fixed, stabilized, and "seasoned".4)By "seasoning" the investment first, you will have a much better idea what the actual financials are, and can therefore better predict how much debt burden it can support and still safely remain cash flow positive.Downside is you need the cash and it is locked in the property until you cash out refi, and it is not 100% certain you will be able to refi when you want and on the terms you want.

Do you go into the deal with excess cash for it?

California charges a minimum tax of $800 a year per LLC, and more if you have gross receipts in excess of $250k.

Then talk to them about what you want in the lease, they can advise you if that is something that is appropriate, or if it is excess or a violation.  

Most of the mathematics I have seen this far don't seem to indicate much excess cash flow in buy and hold properties.* Often new investors are advised to stay local when making their first forays into the market, however what do you do if the areas which interest you the most, the ones that seem to be experiencing the best growth and appreciation, are distant?

Currently, I use part of the rent excess to pay my monthly car note and cell bill.My potential partner is successful in the CO concessions industry but I am not too how savvy he is in REI.