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Updated over 5 years ago,
How much in reserves for a flipper to get through a recession?
Experienced flippers who have weathered a recession well: how much is “enough” when it comes to cash reserves? I see 6 months as a rule of thumb. Is that accurate? I’m assuming that this includes salary to self + carrying costs for all investment real estate. I’m also assuming that those who have 6 months cash are not using hard money for their flips, but are instead using their own cash for the whole transaction and improvements. Is that accurate? Does that mean one can continue to flip and make money during the recession, even if supplementing with reserves as needed? I understand that cash is king when the market drops (so more is better so that you can snatch up properties). My question has more to do with getting through my first few years of accumulating cash and earning a living without putting my family in a bad spot if and when the market bottom falls out. I recognize that no one knows, of course-just looking for recommended cash reserves from those with experience needing them!