What kind of reserves do banks want property owner to have?

[Mark Hu]

Assuming one has 3 properties, each worth @ 1 million each, with a mortgage of 400k each. 1 building is fairly new, and 2 are older buildings. What kind of cash reserves would a typical bank want you to keep? Especially if you want to get a line of credit, borrow more money, etc?

Thanks

[Bill Gulley]

Residential, owner occupied is 3 months PITI, BTW.

Commercial will be 6 months to a year, rather subjective really as the type of property, age, condition, location, market and expected income are all considered. It's not just an issue of PITI, as it is with operational expenses and holding costs. Generally if a lender is accepting your project with a debt coverage ratio of 125% reserves will be more critical than if the debt coverage is 175%. :)