Cash Reserve Question

[John Gambone]

Hello Everyone!

I have a couple questions that I would like to get more experienced people's thought on about Cash Reserves on SFR and Multi-Family units. And more specifically when to cap your reserve account and put the monies into cash flow and making more deals.

I am currently looking into two different types of properties that are on the opposite sides of the spectrum from each other. One is a FSBO SFR I am looking to buy for $30K and the other is a 12 unit Multi-Family from an associate of mine.

The NOI calc I am using on both has the following:

Monthly Mortgage Payment

Taxes

Insurance

Management Fee (10%)

Maintenance Cap-Ex Escrow (3.5%)

Vacancy allowance (8.125 %)

Utilities (Water and Garbage paid on the MF)

After all my expenses my cash flow per month on the MF is $1,500 and the SFR is $220. I would love to get opinions on if/when I should put a cap on my reserves (Maintence and Vacancy) and put the cash used on them into cash flow and more deals to help scale my business.

Thanks in advance for reading and your thoughts! Happy Monday!