Cash Flow allocation?

[John Roeder]

Hey guys and gals! I am a newbie and after tons of research I think I have narrowed down my market. I am excited to purchase my first rental and I am at the point where the only thing left to do is pull the trigger, but I have a few final questions I wanted to bounce of someone with experience. In terms of allocating part of the rent to vacancy/repairs/cap ex, what if I took it all as cash flow instead of saving it because I already have approx $5000 for those events already saved up?

[Trevor Tilton]

Hi John! As a rule we try to have 4% of each property's value on hand for repairs. Any less than that is dangerous, any more than that and that's money you don't have working. This system works great for us!