Financing with no money in reserve

[Anthony Butcher]

Hi,

I am trying to get my first investment property, and a couple of banks I spoke to are asking to see 6-12 months of reserves in my bank account to cover the mortgage.

I am working on saving money towards a deposit, but now it looks like I also need to save more to have in reserve.

How do you secure a loan without having to save 6-12 mths. 

[Jacob Hornberger]

Quote from @Anthony Butcher:

Quote from @Ned Carey:

@Anthony Butcher I don't mean to be a smart *** but why would you want to? Having no reserves is very risky. What do you do when something goes wrong or you have a cost overrun?

You cold use a partner, private lender or borrow more than needed. Essentially you could borrow the reserves. This is both risky and tough to pull off. 

I do have a proper plan in place to be in a good financial spot before jumping into my first investment, but occasionally I see good deal, that I would like to jump on, and that's where the risky part comes in. 

for the price point I'm looking at, I can cover the mortgage payment, if I am able to come up with the down payment.

I know reserves is important, but I here more people talk about having the down payment vs having down payment and reserves, and I guess I never thought of it being necessary for an approval from the bank as it's not needed for a personal property.

I appreciate your feedback thanks 

 It's definitely risky buying a property without any reserves, I would suggest against it. I get into the same situation where a good deal comes up where you feel like it's stupid not to buy it. But, at the end of the day, if you don't have enough cash to hedge some of the risk (unexpected repairs, etc.) it's probably not worth it. I feel like that's what some people skip over when the talk about buying properties with no money out of pocket, I think you still need to have cash on hand to cover the unexpected. Or, bring in a partner that can.