Question abt general operating funds and how to plan accordingly

[Justin C.]

Hi BP,

I have 6 buildings and 9 units since starting Dec 2014. Portfolio CAP of 14% with saving for taxes, insurance, utilities on a few, 10% maintenance, 8% vacancy, and 10% CAPEX. Monthly cashflow is $850. My question is about sustainability.

I am at the back end of my 1st single family home tenant turnover and will have abt $1k left in my CAPEX fund. We had to paint the whole house, new appliances, moved some cabinets around in the kitchen and rebuilt the pantry. Overall great improvements to the house.

Going forward though, painting alone will have cost me $1k for this house. With future tenant turnovers inevitable, saving 10% maintenance and 10% CAPEX is really just enough to cover a turnover let alone a roof, furnace, or other major expense. Just curious how the overall finances really work in the game.

Thoughts?