What to do with cash flow?

Question

If I have 30k in cash reserves for one property, would it be smarter to use the cash flow to pay down the loan quicker, save for another property, or continue to build cash reserves for unexpected expenses?

Caleb Brown · Answer

Up to you. If you have personal income outside this that you can use to add doors then I'd leave the cashflow alone, it can be reserves for this and future properties. Once the reserves hit a point you can use some to purchase another. Paying down the loan is often ideal for long term properties you'll hold awhile. 30K is a good amount for rainy days

Timothy Patten · Answer

In this scenario I would have a w-2 that can cover my expenses and save for future properties. Since I’m starting out, I would mostly focus on single family homes and save apartment buildings for further down the road.

James Mc Ree · Answer

The answer depends on your financial plan. Do you want another property?

$30k Is a high reserve for a single SFR. It might not be enough for a large apartment building. You need to provide more context to decide what to do with it.

In the meantime, find a good investment advisor for 2 purposes: help identify where to invest your cash until you need it; and develop a full financial plan that includes your family goals, income, expenses, etc so you can map out your future with (or without) you real estate.