How much capital should I have saved up prior to a purchase?

[Matt Kistner]

Good Morning Bigger Pockets and Happy Friday! 

I looked at a 4 bedroom duplex last night that is  in a great location, it sits right across the street from UHS hospital in Binghamton, NY. It is in great condition it was built in 1994 and is listed for 139k and was newly updated by the realtor's brother who owns his own contracting company. I would like to know how much capital I should have saved up to get a gauge of where I am at currently prior to going through with an  investment property.

I understand every situation is different and that I must be prepared for the worst case scenario (vacancy, evictions, etc) I am just wondering if my earned income is 2500 take home a month, and my expenses such as a mortgage payment, taxes, and insurance all come to 1100 can I get away with having 5 grand in the bank after the down payment or is this walking the fine line? I will be having a home inspection done assuming I go through with this purchase. 

Thanks,

Matt Kistner

[Bob Okenwa]

It depends on the lender. One may require 6 months reserves while another may require 2 or 3. For you own personal well-being, you should probably have a few months reserves saved up for a worst case scenario.