PLUS a 50% cushion on your renovation budget if you are inexperienced2.

Once I have a great team of colleagues and a comfortable financial cushion, I would like to do rehabs and eventually own and manage multi-family properties.While I’m based in Orlando, FL, I’m interested in investing throughout FL, GA, VA, MD and DC.RE experience:I have some prior experience in real estate as a landlord for a few condos (I’ve sold those properties).

I set aside about 60k in start up capital and also another 20k as a cushion for living expenses until either I was completed with my first BRRRR or possibly flipping would be a better option.

Emergency Fund: Maintain a financial cushion or emergency fund to cover unexpected expenses or periods of low rental income.

For really low priced houses you may need to only pay 50% ARV minus repairs in order to have enough of a profit cushion that you can handle an expensive gotcha or two.3.  

Nick  Give yourself a better cushion and buy a smaller property if you intend to work with just under $200K.

Hi there Bryan,The formula that I like the best is as follows:ARV- 20% Profit-10% Miscellaneous (closing cost, holding expenses, utilities, Reno cushion)- Reno cost= The maximum offer priceNow, if the property I'm buying has a very high ARV, I usually lower my 20% profit a little to maybe 10/15% because even at that price a lower percentage of a higher number can still be higher than 20% of a house with a lower ARV; so it could still be worth it for me.

Most rehabbers are looking for a15to 25% profit from their rehabsthe formula I use is  ARV- repairs-Holding cost 10% of ARV -desired profit15% of ARV -Cushion 5% of ARV, gives you your MAO.  

They are not strongly correlated.So, to answer your question, however much debt you choose to use, make sure that you have a large debt service coverage cushion.  

the front doors looked like pin cushions.. but you talk about instant feedback.