What should I do with excess cash flow (after expenses)

[Peter Kim]

I know this is based on the goals I have for my self but a general rule of thumb, after deducting expenses from my cash flow, should I 

A) Use the extra $ and put it in the mortgage 

B) Save, save, save to buy another property in the future

C) Is there a third option that I'm missing?

[Dave Poeppelmeier]

Reserves. It's very tempting to just want to keep buying, but either save your profits or contribute your W2 income to make sure you have money for the unexpected roof/furnace/leak/etc. I made that mistake early on, and luckily it didn't bite me too bad. Don't rely on lines of credit either (HELOC, CC, etc). Those can disappear overnight, then you'll be very exposed to the big unexpected event. Commercial banks also like you much better (down the line, of course) if you show you have Reserves in place.