I am looking to buy my 4th investment property to live in with a 5% down payment. I am waiting on my tax return to start moving. I currently have 3 duplexes. How much of a cash reserve will I need for this move? House A PITI $2000 and rents at $2250 per month. House B PITI $811 and rents at $2000 per month. House C PITI $807 and rents at $2100 per month. Total debt owed on all 3 houses $338K. I have the money for the 5% down on a house 200K and then around 20k left over. I was just trying to figure out how much I need all together or do I need to wait longer and save.
Realtor · Austin, TX · Member since 2016 · 1k+ posts · 1k+ votes
6y
@David Palmer it depends on many factors but I would say the 3 significant variables are:
Your risk tolerance: how comfortable you are with leverage, I tend to be risk adverse so I always have ample.
Your income: if you save $5k a month you might be able to feel more comfortable with lower reserves as you can cover surprise maintenance items or repairs.
Property condition: if all 3 properties have original water heaters and air conditioners from 1980 there is a strong chance those are coming due shortly
I have seen many recommendations for $5-10k per property for a safety net and follow that guideline.