Help Managing my Reserves

[Joe Rogan]

Hi BP. In the last three months I have managed to purchase my 3rd and 4th property. Up until now, all income has been saved. I only dip into my reserves when the properties need repairs or upgrades. However, now with 4 units (7 doors) I need advice on how others manage their reserves on properties (PMI, Vacancy, Repairs, CapEx) Currently, all my properties are managed professionally. When I receive my rent check at the end of the month, Management and any Repairs completed that month, by management, are excluded from the total amount. I then put the remaining balance into a checking account. Rather than just a lump sum in one account I should be organized enough to look at my accounts and say I have X in Vacancy, and Y in Capex etc... I would love to hear what more experienced members recommend I do to separate the different reserves as I continue? Hoping there is a simple enough system that can be implemented into my work flow. Thank you in advance for your input!

-Joe

[John Warren]

@Joe Rogan I wouldn't personally spend too much time segregating the different reserves. I would just keep a set amount in the bank that makes you comfortable. I personally like to keep around $2500 per unit in reserves. In a larger multifamily property, this gives me enough to do turns on around 1/2 the units at any given time. Other folks may keep more or less, but don't over think it! The fact that you have reserves puts you ahead of the masses...