Buying my first property

[Joe Spence]

Hey BP,

My wife and I are looking at buying our first multi family soon, either a duplex or fourplex and I’m not sure when the right time to pull the trigger is. I am not sure how much I need to have saved up in reserves, and how much to have as an emergency fund. I am going to start with being an owner occupant then branch out from there. Any advice would help, even if it has nothing to do with this question specifically. Thanks!

[Eric Black]

Hi Joe and congrats on your decision to pull the trigger. Don't wait for the right time to pull the trigger, wait for the right property. If you try to time things perfectly you'll never buy a property.

As for reserves, most lenders will want to see at least 6 months of reserves to cover the mortgage, taxes and insurance at a minimum. Depending on the property you may want more than that for unexpected repairs. If it is an older property that needs to be updated then there may be more chance for something to come up. If the property is new or has already had some updates then those chances may go down some. It's also a matter of personal comfort and risk. How much would you need to feel comfortable if the other units were vacant for 6 months?

There is no hard and fast rule so use your best judgement.

Best of luck!

Eric