I manage properties for a man that is wanting to sell some of his rentals. He is 90, his kids don't want the future hassle etc... We are going to do a owner financed contract for deed so I don't need any money up front. I see a lot of people says you can get in real estate with no money etc, but what if I have a HVAC system go out, and do not have the money to pay for a $3,000-$5,000 system for example. Do people really get into this with no money?? I just don't see how!
prior to 08 and the GFC they did by the hundreds of thousands. and many lost the home because they could not afford the turn overs or major cap ex items.
now lenders REQUIRE cash reserves and anyone buying a rental in my mind should have 10k in reserves minimum and increase that a little bit with each one you buy..
Its not uncommon in many of the C class areas to have houses trashed by tenants , insurance does not cover it and your out 5 to 7k before you know what hit you. not to mention the aforemention HVAC... plus the condenser are stolen quite often that's always a shocker.
@Camie Jelinek . Banks typically want 6 months of fixed expenses in reserve for each property you buy. I believe that increases to 12 months of expenses per property after you have acquired 4. For your first one, I would say do at least 6 months to be on the safe side.
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