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Updated almost 7 years ago on . Most recent reply
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I need some guidance about reserve money
My goal is cash flow and earn $100k per year from rent. Assuming $200 per door after setting aside all expenses conservatively. I'm actually trying to look ahead and plan how much I can save for new deals over time. My goal would be to retire by 45-50 yo. Right now I'm 30yo.
I live rent free at the moment and I save $500 per month in Roth IRA. Also I can even bump that some. At some point il need to get my own place and I hope to house hack or use some investment property income to cover living expense.
So not counting the brrrr stratagy(not confident with it yet) I'm adding up how much I can save over time.
I'm assuming I need to have $10k in reserves for each $50k property. Now this is my first question. Is this $10k necessary for each house? So for 2 I need $20k? I do believe I should have $10k starting out for the first property, that's smart, but by the time I get the second I may have built up more reserve from the % of rent I set aside for repairs. I know capex needs to continue to build up for major upgrades/repairs but what's the safe nunber for reserves?
I'm asking becuase if I had to save 10k for each property it's going to take a lot longer. I definitely want to have adequat reserves I'm all about that and that's why I want to know what's a good conservative amount without going overboard and loosing possible money that could go to deals.
Is there a good technical book about the Cash flow buy and hold stratagy?
By the way I would love to do the brrrr stratagy I just don't feel like I can at this point. But I'm sure il understand if I get into this game