Updated almost 8 years ago on . Most recent reply
Reserves - How much cushion do you need?
Hi All,
My goal is to purchase a multi family rental in 2018 and house hack it. I'm curious to know how much you all budgeted for reserves when you purchased your first deal? Would you take your 401k into consideration?
Dan
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Peter Tverdov
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Your reserves should be 6 months of PITI per investment property. Reserves can be stock, bonds, cash and yes up to 50% of your 401k in most cases.
Reserves is not your HELOC or Credit Cards like several foolish investors tell me. Those things are "credit" and credit can be frozen when markets get messy re: 2007-2008.
Good luck.
- Peter Tverdov
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