Updated over 7 years ago on .
Most recent reply
presented by
Escrow Shortage killing cash flow
Hello BP, i'm relatively new and just starting to build some momentum with two cash flowing SFH rentals. I just got notice that after escrow analysis, the payments on each of my properties will be increasing by about $200/mo. This pretty well kills my cash flow, at least on one property and on the other it brings a nice $300/mo cash flow down to $100/mo. It seems there is no accountability with how far off banks are with their escrow analysis, I understand property taxes increase and even insurance just slightly but I am getting hit with both paying back the shortage from the previous year (about half of the increase) and now paying additional into escrow as they account for both higher taxes and a higher reserve (the other half of the increase). Does anyone have good advice with any of this? Lesson learned I suppose and I will be more conservative in the future but I don't know how to anticipate this one.
PITI property #1 went from $1401/mo to $1597/mo
PITI property #2 went from $1014/mo to $1272/mo
Any advice is appreciated.
Most Popular Reply
This shouldn’t be an issue. You will get any escrow that’s not used back after the property taxes and insurance are paid. I’d be more concerned if the escrow numbers are on target, that would make these 2 houses very tight.