Reserves and Scaling Cleveland, Ohio Multifamily

[Mike Schorah]

I can get a $52k HELOC on my primary residence and $15k in a SDIRA.

I was thinking of buying $80k-$100k multifamilys in Cleveland, Ohio with 25% down on each.

I’m trying to calculate what to have in reserves and the timeline for scaling. 

Here is what I came up with for EOY 0:

     # Of Properties     Reserves Have     Reserves Needed

     1 duplex               $40,000              $10,000

     2 duplexes            $30,000              $20,000

     3 duplexes            $20,000              $30,000

I'm calculating 50% of my down payment on each duplex as an additional $10k in reserves (due to being able to take a HELOC out on that new investment property) and not including the SDIRA. So from my calculations, it is only safe to buy 2 properties now and a 3rd a year from now when I get $20k total in my SDIRA. And that would give me $32k more in possible HELOCs for the Cleveland properties at the end of year 1 ($10k HELOC after waiting 45 days from the time of the purchase of the 3rd property, $20k from the 25% down on the first 2 properties and $2k from the mortgage paydown of the first 2 properties. Not including any appreciation here as I consider that a bonus, if it's possible at all. Also not including cash flow. To be conservative, I'll consider that to be added to the reserves.).

Is this reasonable as to what to expect for reserves and what should I have in reserves for each additional property?

How long does it take for properties to stabilize to where I’m not digging into my reserves for repair expenses?

Given my finances above and the fact that I can save at least an additional $5k/year from my primary job, what should I expect in regards to scaling? Should I expect to safely buy 1 new property a year? 1 new property every 2 years? Or what? Definitely not trying to stretch myself thin here.