All Forum Posts by: Sebastian Roy

@Michael Ealy Great, Thanks for the advice!

@Joe Scaparra wow, awesome to hear! If you don't mind me asking, how did you go about buying all your units? I'm 21 years old and am currently living with my parents and saving as much $ as possible. I'm in the process of looking at rental properties and am planning to purchase within the next 6 months. The property I purchase will be a multi family and I plan on putting down a small down payment (3-5%) and I will owner occupy it for approximately 1-2 years then I plan on moving out and buying another multi family and owner occupying that one and then keep expanding from there. 

On another note, what's your opinion on LLC's? I hear a lot of talk about "you must create an LLC for your rentals for asset protection". Seeing how you have 19 units and no LLC's, have you had any bad experiences in the past that made you think about creating an LLC?

Great, Thank you! @Terrell Garren

@Matt castle got it, so that $25-$50k is just an estimate of how much you feel comfortable with in reserves for your duplex example? Would you save a certain % each month and build that savings up over time or that's just a constant amount you would keep ready?

Hello everyone,

  I am curious as to what is the best way to separate/save cash reserves per category for your rental property? 

  In the biggerpockets podcast episode 193, @Brandon Turner said that for most of his rentals, he saves a certain percentage of his rental income for each category (Vacancy, CapEx, repairs & maintenance, and Property management) each month and deposits it into his personal bank account. He says that he keeps enough money in his account to cover any costs that may come up so its not a problem for him to come up with the needed money. Brandon later states that for his partnership deals (to keep finances more organized) he deposits a certain percentage of monthly income into different bank accounts per category (example: 6% vacancy, 8% CapEx, 10% repairs & maintenance, 10% property management fees).

I feel like this is the best way of saving the reserves because you will not only be more likely to have the money already saved the moment you need it (whereas in your personal bank account you are more likely to tap into it), but you can also easily track how much money your are spending in each category.

 Finally, If you have multiple properties, I believe it would be best to create a separate bank account for each property to save reserves instead of having one bank account for all your properties and comingling the cash because it is likely certain properties will require more maintenance than others and will require more money in expenses, so with this method it is easier to get off track.

If anyone has any advice or methods they use to save reserves for their rental properties, I would much appreciate hearing them.

Thank you, Sebastian.

@luke saglimbeni awesome, hope to make it! 

@Luke Saglimbeni awesome! I'm looking forward to hearing more details and hope to make it!

Hi Luke, just found out about this network meeting hours after the event, really bummed I didn't know about it, otherwise I would've came, I live locally in Belchertown. Anyways, I look forward to more networking meetings like this and meeting everyone. Thank you.

@Nicole heasley @tj hines thank you!

@Ken Miller I will certainly think about it and weigh my options. Thank you!