Investors Keeping More Cash on Hand

Member since 2025 · 392 posts · 95 votes

One of the biggest shifts I’m seeing this year: Experienced investors are keeping more liquidity available instead of max leveraging every property, Why? higher holding costs, slower exits, more uncertainty in some markets

The “all cash into every deal” strategy is getting a lot riskier, Are you keeping larger reserves now than you were a few years ago?

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William WhitleyBusiness Member
Accountant · TN · Member since 2025 · 146 posts · 92 votes
5mo
There's a healthy balance between leverage and cash in a property. If you can maintain a healthy cash flow while using leverage to acquire properties, that can provide the opportunity to grow your portfolio at a faster pace. The more cash you have in a deal, the less cash you have to invest in other properties. However, too much leverage can stifle cash flow. Therefore, finding the sweet spot between cash and leverage is essential to maximize the profitability of your portfolio.
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Jimmy LieuBusiness Member
Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
5mo
Quote from @Frankie Vozzi:
One of the biggest shifts I’m seeing this year: Experienced investors are keeping more liquidity available instead of max leveraging every property, Why? higher holding costs, slower exits, more uncertainty in some markets

The “all cash into every deal” strategy is getting a lot riskier, Are you keeping larger reserves now than you were a few years ago?
Yeah, I’ve definitely shifted toward keeping more liquidity compared to a few years ago, and I’m seeing a lot of experienced investors do the same. The big change is the margin for error just isn’t as forgiving right now—higher interest rates, rising insurance and taxes, and longer days on market in a lot of areas mean cash flow can get tight faster than it used to. Even solid deals can turn mediocre if you don’t have enough cushion for vacancy, repairs, or a refinance that doesn’t come in where expected. Personally, I’m a lot more intentional about keeping several months of operating expenses per property plus a separate reserve bucket for portfolio-level surprises, instead of pushing every dollar into the next acquisition. I still like leverage, but I’m treating liquidity almost like part of the strategy now rather than “idle cash.” It also helps with flexibility because opportunities do pop up when sellers are motivated, and having dry powder lets you move without scrambling. Overall I’d say the “all-in on every deal” approach feels a bit outdated in today’s environment unless someone has very strong buffers elsewhere.
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