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Updated almost 9 years ago,
Should I use my 50% rule reserve money to invest in a security?
Hey folks, NewB to the RE game here. I am currently studying for my RE License in Colorado and want to invest in rental properties. I have learned about the 50% rule (explained here https://www.biggerpockets.com/blogs/4454/32123-wha...)
and was wondering if any seasoned investors saw a problem with using the saved funds in a highly liquid investment vehicle.
for example:
I save 50% of my rental income in a separate account to compensate for maintenance and vacancies, and use that money to purchase dividend bearing stock. When a major expense occurs, I can easily sell the security and have cash to pay for the expense.
Has anyone tried this strategy? how has it worked for you?
Thanks for the input, I hope to (L)earn much from BP.
Samuel Hall