Total $550k assembled. How much of it to keep for reserves?
2 Replies
Dennis Nikolaev
posted about 1 year ago
Thank you for opening.
I'm in the final stages of assembling several HELOCs to total 550k to buy an OOC multifamily. I'll be looking for an under maintained property to reposition.
I know, I need to split the money into the 3 piles.
1. Purchase
2. Rehab
3. Reserves
The reserves are mostly designated for vacancy period during the repositioning.
How would you split the money?
P.S. it is my first foray into multifamily.
Hai Loc
Specialist from Toronto, Ontario
replied about 1 year ago
Originally posted by @Dennis Nikolaev :Thank you for opening.
I'm in the final stages of assembling several HELOCs to total 550k to buy an OOC multifamily. I'll be looking for an under maintained property to reposition.
I know, I need to split the money into the 3 piles.
1. Purchase
2. Rehab
3. Reserves
The reserves are mostly designated for vacancy period during the repositioning.
How would you split the money?
P.S. it is my first foray into multifamily.
I would try and leverage $500,000 and see if you can get something for $1.2-1.5M
Depends on what type of property and what condition it is at. If your doing a gut rehab then I would only keep a small reserve like 5% back because you already did all the work..
Dennis Nikolaev
replied about 1 year ago
@Hai Loc,
I want to start with all cash. Just to get comfortable with the process.
Next deal I'll leverage up.
Also, I will not be looking for a guy rehab as I dont know what I'm doing, yet.
I'm thinking to target
1. Purchase price 350k
2. Rehab 100k
3. 100k reserves
What do you think?