This might also be a bit of a personal finance question as well but wanted advice. Is there a set amount I should have in reserves to feel comfortable in case something catastrophic happens? I'm a bit paranoid so right now, I'm putting away everything I receive from rent I receive and have enough for lets say, a total roof replacement, if necessary.
Should I just keep putting this money away or are there smarter things to do with it? I guess I'm also putting it away in case a tenant moves out but that's my mind also going crazy. Any advice would be appreciated.
Investor · Fall River, MA · Member since 2014 · 399 posts · 300 votes
6y
@David Czech I love that you are storing cash away in a reserve account.
The only thing that scares me about this post is that sentence about saving for a catastrophic event.
What we think about we bring about and what we focus on expands. I know that sounds crazy, but let's just pretend that is how the universe works.
You should instead be storing your reserves away so the banks and private lenders will feel much better about lending you money on your next deal.
I hope you can see the subtlety there and how shifting from savings for fear to savings for abundance will dramatically change your business.
We don't use our own money in our deals. Instead we use our reserves as proof and collateral for our lenders to trust us with more money on bigger purchases.
You can always make an insurance claim or take out a small loan if something catastrophic ever happens.