Making Your Money Work In Between Properties

2 Replies

Hello BP Community!

Newbie here and i'm about to close on my First Deal, and i'm very excited! This community has been invaluable in answering questions and providing advice, thank you! While making my plan for the next 1-5 years, the time I've estimated before being able to afford another down payments for the next property, i ran into a question i didn't know the answer to. How do you make the most of your money (make it work for you) while saving for that next down payment? Do you just keep throwing into savings? Invest in stocks, index, bonds, CD, Mutual Funds? My goal is to keep increasing the pot for the next deal that comes my way, yet it seems like a waste to let it sit in a savings account with so little returns. I am no guru with stocks, the whole point which drew me to real estate in the first place. Please let me know what you do?!

Best,

Greg

@Gregory Davis

Gregory, I do some things just plain wrong! One of which is to just throw all the real estate income in a savings account. I am so bad that I pool cap ex, repairs, taxes, you know the stuff the experts say to have in separate accounts ready to deploy at a moments notice. If I have a lucky streak I rob all the cash and buy another property if things keep going wrong I hold back till I feel like I'm caught up and see if there is enough to take another stab at it. Mind you I do have the resources to make emergency repairs and have no debt on my rental properties so I do not fear vacancies like many do and the pool of cash builds back quickly.

I suppose if I was organized or not so darn busy I would do something that yielded better returns but hey it works for me.

I do this the slow boring methodical way but so far so good.

I know this didn't answer your question. I just thought id let you know that there is no cast in stone way. Just rat hole it somewhere for when you need it.

Originally posted by @Dean H. :

@Gregory Davis

Gregory, I do some things just plain wrong! One of which is to just throw all the real estate income in a savings account. I am so bad that I pool cap ex, repairs, taxes, you know the stuff the experts say to have in separate accounts ready to deploy at a moments notice. If I have a lucky streak I rob all the cash and buy another property if things keep going wrong I hold back till I feel like I'm caught up and see if there is enough to take another stab at it. Mind you I do have the resources to make emergency repairs and have no debt on my rental properties so I do not fear vacancies like many do and the pool of cash builds back quickly.

I suppose if I was organized or not so darn busy I would do something that yielded better returns but hey it works for me.

I do this the slow boring methodical way but so far so good.

I know this didn't answer your question. I just thought id let you know that there is no cast in stone way. Just rat hole it somewhere for when you need it.

 @Dean H.

I truly appreciate your thoughts! That seems to be the strategy that many I've spoken to follow as well. I can definitely see the pros as it allows your cash to be readily available! I do plan on taking the savings from Cap ex, Maintenance, and Vacancy and having those just sit in a savings until ready to deploy; along with a nice nest egg of "oh crap" money. I just feel as thought i'm wasting the potential of all that cash just sitting there, not working for me. The advice you receive from multiple sources is so different as well. I either hear, "Diversify!" or "Concentrate your power in one area". While my true love and main goal is real estate, it just feels like i'm wasting great opportunities by having it sit there! Thank you again for your great advice!

Best,

Greg