Reserves needed to buy five more houses

3 Replies

Isn't it usually 6 months payments for each property you own? I ask because I'm considering selling two of my houses and using the proceeds to buy 5. I have about 200K in cash on hand that I'm not touching, since I'm just using the proceeds of the two house sales, so I SHOULD be good to go, but still worried that this may not pan out. I'd owe roughly 1.8 mil, let's say 2 mil at this point if I did this. With monthly payments of about 13.5K between all the properties including the ones I own currently and the five I plan to buy, which pans out to about 80K in reserves.

Also, perhaps buying a couple of four plexes would be a better bet if it does become an issue? I could buy some decent four plexes for 1.2 mil with 25% down non owner occupied, and still have cash left over from the other two sales for a rainy day/market crash.

I think your last point about having cash for a rainy day/market crash is very important. You don't want to spread yourself too thin.

Originally posted by @Antoine Martel :

I think your last point about having cash for a rainy day/market crash is very important. You don't want to spread yourself too thin.

Yeah, that's why the 200K is more than enough reserves and I'm only using equity from existing houses that I'm selling to buy more. 

Originally posted by @Jack B. :
Originally posted by @Antoine Martel:

I think your last point about having cash for a rainy day/market crash is very important. You don't want to spread yourself too thin.

Yeah, that's why the 200K is more than enough reserves and I'm only using equity from existing houses that I'm selling to buy more. 

 You're right $200k is plenty. 

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