@Cassi Justiz I am glad that I am not the only one that is working this way!
I save all cashflow until I have met my number for each property, all reserves kept in the same business account. My number is 2-3 months of expenses (P&I, Insurance, and taxes) plus 3-5K, depending on the size/expected future CapX, per property. I want to get to 25K for my first 5 properties.
@Corey Block I came up with these numbers with the help of more experienced folks, but don't have the personal experience to back it up. Just wanted to share my recent education:
I am new, but eventually will hit a cap on what I need for reserves. It is unlikely I will need to replace 5 roofs all at once, and if I did it would be an insurable event. For me, once I have more than 5 units it is going to be enough to cover my overall expenses (P&I, Insurance, and taxes) for 2-3 months, plus a roof for every 1 in 5 properties that I own at that time, which is about 10K in my area.
For my first 5: 5K (expenses) x 3 + 10k = 25K
Being new, this basically equates to 5K a property anyways but will shrink as I get more properties. You might already be below that with 18 units.
This is too conservative for some, not conservative enough for others. As someone else already said, you have to factor in how a lender will see your numbers as well.
I hope this helps,
-Will
