The Smart Investor’s Secret Weapon: Reserves

[Eric Nelson]

The Smart Investor's Secret Weapon: Reserves

In a market where interest rates are high, deals are tighter, and uncertainty seems to be the norm, reserves are one of the most underrated forms of protection an investor can have.

We often talk about cash flow, returns, and growth — but what truly sustains a portfolio in challenging times is the ability to withstand the unexpected. Whether it’s a surprise repair, a vacancy spike, or a refinance delay, your reserves are what keep you from making reactive decisions that can hurt long-term performance.

Strong reserves don’t just protect the property — they protect your reputation, your investor relationships, and your peace of mind.

Here are a few quick takeaways to remember:

• Hold a minimum of 3–6 months of operating expenses for each property.
• Build a capital expenditure reserve — roofs, HVAC, and parking lots don’t last forever.
• Plan for the unknown. Markets shift, but disciplined operators don’t.

Reserves aren’t a “nice to have.” They’re a reflection of stewardship and wisdom in how you manage investor capital and build for the future.

If you want to dive deeper into how we’re structuring reserves in today’s deals, feel free to reach out.

Let’s keep building wisely,

-Eric Nelson