Updated over 7 years ago on . Most recent reply
Seed Capital vs. Reserves
What do you believe is an appropriate percentage of Seed Capital vs. reserves that you should have. For example, if you are buying a $100k house and have to put 20% down how much should you have on reserve (20% or more)?
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Jay Hinrichs
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Jay Hinrichs
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@Andrew Johnson undercapitalized landlords run real risk of going down the financial toilet. I have personally witnessed it countless times... owning and running rentals REQUIRES reserves .
use an extreme case like Houston Harvey flood.... 5 rentals all flooded no flood insruance.. 100k out of pocket to pay negative cash flow taxs and rehab to get them re rented.. if U don't have it you run the real risk of losing the properties altogether.
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