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Updated over 8 years ago on . Most recent reply

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Joseph Tate
  • Floral Park, NY
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Capital Reserves

Joseph Tate
  • Floral Park, NY
Posted

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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1,007
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Brian Adams
  • Syndicator of Large Apartment Buildings
  • Glen Mills, PA
1,630
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1,007
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Brian Adams
  • Syndicator of Large Apartment Buildings
  • Glen Mills, PA
Replied

@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.

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