Leverage: How much is too much?

[Omar Burnett]

Hello all,

I am a newbie still learning the ropes, and so far it seems that acquiring my first rental unit should be pretty straight forward. Although it may not be easy and will take time. My questions are:

What amount of much leverage is too much in terms of borrowing money from banks/hard money. I was too young to remember the 2008 mortgage crisis, but it seems as if a similar situation happens most investors will be wiped out if banks began calling loans.

How much money in reserves is necessary (in terms of months/years)? Should these reserves be set in place prior to acquiring the property or set aside overtime while collecting rent?    

[Theresa Harris]

@Samantha Cash  Most will put the minimum amount down (20%).  Then you have to two groups...those that pay off their mortgage over the course of the loan and those that once they have a good amount of equity in it will refinance and pull that out.