Just wanted to stress the importance of reserve funds to new investors. Most of my investments are newer units 2000-2006. Due to lack of building since the crash, a 2006 unit is almost considered new construction. There are not a lot of new properties that were built between 2008-2013. In three short months almost my entire reserves are gone! New roof. Repairs. New A/C in the morning, etc. Having reserves has kept me from needing cash and not having it. Repairs often won't wait. I felt pretty secure having 25K put aside. It ALL went away in three months. Next month tax bills arrive. If you don't have funds put aside you can BET you will need them at the worst possible time.
That may be what it is like down there, but up here, projects take so long that people were still building in 2008. People also didn't stop maintaining.
You don't have to have money "set aside"- but you do need to have access to instant credit (i.e. credit cards), and the ability to pay those off (i.e. a ready to go equity loan).
Risk management is variable for everyone's level of exposure, but having money aside in cash is a great idea, but holding onto too much cash reserve means your money is sitting idle. the equity loan and credit can be your bridge into the larger numbers.
@John Thedford thanks for the post. That's very unfortunate for you but appreciate the advise. It'll help a lot of people out.
Seems sometimes to me in all the things I've done that nothing ever happens when you don't have any money, as soon as you get some extra cash bam, something comes along to suck you dry.
As often as it seems that may happen, it's just a coincidence, and without any cash reserves you can find yourself in some very big trouble very quickly.
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