All Forum Posts by: Anthony Garcia

I didn't mean to say the deposit was my reserves... basically, I have 3 months PITIA plus the deposits assuming those all would go back to the tenants.  So, you're right, really I only have $24-25k reserves once I take out the deposits.

Interesting idea with the HELOC... How does that affect DTI? Lenders just count what you currently have tapped or your full potential credit? Thanks for the idea!

They're all in really good shape.  One needs a roof soon ($3500 estimate)  But all the others are within the last 3-5 years.  All are relatively freshly renovated as well... some have older HVAC units but are tuned yearly.  One has old plumbing that will probably need revamped ($3k) in the next 2-3 years.  I was hoping to be in a position to just "sit pretty" when hell breaks loose even if I'm not expecting it to in the near future.

Thanks for the reply.

I know this has been asked a million times over the years in a generalized approach... but I want to discuss my current situation, reserves, etc and get opinions on whether I should adjust.

I own 7 properties, 2 2-units and 5 SFRs (9 doors). 

I cash flow about $6.8k/month after PITIA pre-tax without my full time job.  My current mortgages/loans add up to ~$9.6k and my rental income (without vacancy) is $16.4k.  I have $986k in debt balance and $550k in equity if I were to liquidate (including realtor commissions).

In a lender's eyes, I have 5 mortgaged properties.  Two of my properties are paid off.  I have one private (family) loan and one equity loan included in that total debt and loan payments above.

Since I'm still under 10 mortgaged properties, I'm able to use conventional financing @ 20-30% down.  Lenders require 6 months reserves which I'm able to account for with just my retirement accounts.  I currently have a little over $75k in retirement accounts which the lender only gives me 60% for (due to withdrawal penalties), so $45k towards my reserve requirements for future purchases.

Now to my question... how much reserves should I have without even thinking about touching retirement savings?  I currently have 3 months PITIA + Security deposits for every single property.  This is $39950 liquid sitting in very low interest checking accounts (rent goes in and mortgage goes out of these separate accounts).  Is this too much, just right, or not enough?  I do dip into this money for new purchases and renovations but quickly replenish it and hold it at this ~$40k mark.  Surplus cashflow goes into more aggressive mutual funds and are also planned to be used for future purchases.

Thanks for any feedback and sorry for the long post! 

I don't think he was badmouthing "wholesalers" but was interested in finding other buy and hold/landlords.

My girlfriend and I currently own 10 rentals in addition to our primary in Baltimore.  She's 26 with 3 and I'm 29 (30 this weekend) with 7.  We could have a LOT more if we did cheaper or section 8 houses but our strategy has been higher end houses around the Patterson Park area (Canton, Fells, Brewers, Butchers).  At an average purchase price of ~200k or so it's a little slower to throw down 20-30% on these houses but we like the numbers and tenant pool we've been getting!  All of our loans have been conventional with cash rehabs when needed (most).

I'm finishing up my first "blue collar" rental renovation in Curtis Bay which may make me love this strategy and perhaps even go Section 8 as you have done!

Hi Kevin, I'm not too familiar with the others but I do have a few houses in upper fells point 21231.  This is also where my first (and only) house hack was.  If you can afford to get a large house in fells the rents are high and the tenant pool is plenty!  My first house was a 2900 sqft 4bd/5ba.  I had a large mud/laundry room I was able to convert into a bedroom to make it 5/5.  I lived in one and rented out the others on individual leases.  I've since moved out and rented my old room but that house currently gets over $4k.  It's more work to have individual leases and you'll have roommates starting off but upper fells seems to be a great location for what you're looking for.

Depends what block you're on.  I own on the 1600 block of Popland.  Check it out I think it's fine.

Neighborhood was too rough and there was too many issues for $80k...  Property was in 21212.  Thanks for the input, everyone!

 Canton, Upper Fells Point, Brewer's Hill, and one (my lower income experiment) in Curtis Bay that I'm almost done renovating.  So that being said, the lower income <100k rental will be a new thing for me.  Average worth of my other rentals (not including curtis bay) is ~$240k.

Yes that makes complete sense.  I honestly don't know the neighborhood so plan on feeling it out tomorrow.  If I don't get a good feeling from it then I'll simply walk away.  I have a house I'm renovating now in Curtis Bay, which in general is a little "shady" but the block I bought (1600 Popland) on is very nice where people keep up with their lawns and look out for each other.

I'm looking at the property tomorrow to get a better sense of condition.  I don't have payment dates but I do have copies of leases provided by the current property manager.