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Updated over 8 years ago on . Most recent reply
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Capital Reserves
Quick question,
Are capital reserves paid into every year. For example, my first year I pay 250 a unit, so on a 100 unit building, the bank will make me put $25000 in capital reserves. Say I don't spend this money, do I have to put another 25000 in the next year or do I have an extra 25000 dollars in cash flow the 2nd year I own a property vs year 1? Thanks in advanced!
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@Joseph Tate, the $250 pu will be an annual obligation to fund the reserve account regardless if you don't submit invoices to your lender for reimbursement.