How much cash do you prefer to keep on hand?

4 Replies

I'm in the process of cash-out refinancing a property, as well as another come September. Small timer here, only 2 investment properties plus by home.. just trying to figure out how much cash I should have on-hand ready to deploy for my next deal when one comes along, OR in the event of a market downturn I'd want to be able to act. Is there any rule to go by? Like % of total assets, is it based on your market you're looking in? I'm not sure what I should be aiming to keep liquid in a paltry 2% savings account while I'm in limbo here.

Any advice appreciated, thanks!

Christian 

I’m pretty much done expanding so I only keep 2 months of mortgage payments in the bank, and I hate “wasting” that much. 

If you want to expand I assume you have to keep your 20-25% downpayment for your next property in cash. Or at least close enough you can get there in 2 months to close. 

I think it depends how you are buying. Someone using hard money will have a different amount of deployable cash than someone buying turnkey conventional properties. I was using hard money so I’d keep my closing costs, down payment, 20% of rehab costs, and holding costs all before purchasing. For me, that could be anywhere from 40-70k

@Bill Brandt @Frank Geiger Thanks guys. I think that works, I have a HELOC for $80k that I would be able to use as a rehab budget and then just keep the down payment money on hand and liquid. What sucks is I'm in a pricy market in Boston and 25% down is a pretty large chunk of change. Oh well, I suppose it's more ideal to be able to pounce when opportunity strikes.

I keep 2 months of holding cost (mortgage, taxes, insurance electric and water) and insurance deductibles for each property.

I have a small emergency fund and save for planned repairs/updates.