House hacking/Monthly Reserves

[Miles Morrison]

My goal is to buy my first property this year, a house hacked duplex, move out after 1-2 years and repeat and have a question about reserves.

(I prefer a conservative mindset)

Example property: age 1930-40ish

Purchase price: 200,000

Down payment: 10,000

Piti: 1300ish

Rent: 1000 per unit (2000 total once I move out and fully rented.)

While living there I will cover $300 of the mortgage

I want to be prepared for cap ex, vacancy, repairs and property management (even though I plan to manage the property for the first 5 years at least), etc. This would be a buy and hold.

- assuming 10% PM fee, 5% vacancy, 5% repairs, 5% cap ex

= 500 monthly put towards reserves

Leaving with cashflow of 200 per month

6000k in reserves at the end of the first year.

I understand there are a lot of other variables that go into this, but these are my main questions

1) when do you stop/scale back how much you put into reserves?

2) do investors usually open a separate/business account to keep finances separate?

3)does this seem too conservative

4)this is the correct general way to think about reserves, right?

Thanks for any advice