Happy Saturday y'all So I been getting my #s in order as I was just approved for my first FHA loan for a 4 plex. I am wanting to know do you put money away right off the bat for reserves ? All units are currently occupied, but by the time I move in 1 unit will be free for me to live in. I want to have 6 months saved, but are there other expenses I need to be aware of?
Congrats on your 4plex. I am no expert but I believe that you should immediately start saving a portion of your rental income for future maintenance, repairs and vacancies. Most suggest saving 10% of rental income for each category. I am assuming you are moving in and will manage the proprty yourself?
@Phillip Gonzales - the answer is YES, you need to save reserves from day one. Hidden repairs, evictions, tenant turnover etc happen when you least expect it. Six mo PITI min. Great job taking action. Good luck with it.
Thanks I figure since I will not be paying my mortgage I will save what the mortgage would be for the first 6 months and just have that saved. For example mortgage is $1450 x 6 = $8700
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