Use all reserves for a good deal?

[JC Leach]

I have an offer accepted on a 4plex. It will cash flow upon the sale. I have a contingency in place for the inspection since it's out of state. My only concern is the down payment and closing costs will essentially wipe out my savings. Is it worth locking the deal down? I've had trouble figuring out creative financing for a buy and hold properties. Seems easier to make sense with BRRRR's and flips. Any advice? Thanks y'all!

[Jonathan Greene]

I would never, ever deplete all of my savings for a deal. Many lenders want you to have 6 month reserves at a minimum left over now so you may want to check with them so you don't get close and realize you can't close. What are you going to do when a major repair comes up? On a four-plex you should have four boilers, four hot water heaters and with no reserves you will be hard-pressed for a solution when something goes wrong. What's your income per door after expenses each month? What if you need a new roof? You either need a backup investor for reserves or pass on the deal. Everyone wants a four-plex and for good reason, but without reserves you may never make money on it if all your profit always goes to repairs and more.