What is the perfect amount of cash for rental prop?

[Robin Morales]

Hello Everyone!!! I am looking to buy my first property and would like it to be a rental. Ideally, I would like to become a real estate investor and am wondering what amount of cash on hand I should aim to have before investing. I’m open to any type of investment. Currently in Southern ca. 

[Scott Trench]

Thanks for the shoutout @Cameron Tope. I believe that for a full-time worker getting started investing in rental property that an appropriate amount of cash is as follows: 

- Cash for the down payment (can be 25%, 10%, 5%, 3.5%, or $0)

- Cash to cover all closing costs

- Cash to cover all expected repairs

- A $10,000 to $15,000 or larger cash cushion AFTER all of the above

This, I believe, insulates new investors from liquidity risk shortly after purchase - i.e. from not having money to replace the HVAC system, or fund a roof replacement. Plenty will disagree, however!