@Colleen Berquist, I agree with @Jake Stuttgen - but is that $250/mo of expected positive cash-flow, after accounting for reserves for: Repairs & Maintenance; CapEx; Vacancy & Property Management (even if you are going to mange it yourself)?

How much cash reserves keep on hand. 3 months, 6 months, 12 months?

Hi Bryan,You and I think along the same lines; I've been looking in Memphis as well, and have considered other avenues to build up cash reserves.  

For cash on hand all they care about is cash to close and reserves.

These conditions usually include appraisal (so the lender can confirm that the property you’re buying isn’t worth far less than you’re paying) but will also generally include any material change in your situation -or the property- as initially disclosed to your lender.The financing contingency, or loan contingency is removed by the buyer by the loan contingency date as defined in the contract.

@Luke Condon There are such things as stated income loans still, but I would just wait until you are a little more prepared before you jump in, unless you also have a very large reserve.

I don't have a lot of cash to work with but I do have a LOC which I reserved for down payments, points, etc for a hard money loan.

For instance I am in process right now in Portlandia  tough competitive market.. bought house right off of MLS system for 400k during the escrow period we were able to confirm 2 new lots  25X 100 each on each side of the existing home.. had to knock down a fence.. but by the time I closed i had the house which need about 5 to 7k in fluff and buff and 2 lots.

I would definitely model it with seasonality because you will need the reserves for the winter.

While I am house hacking in it, my cash flow would be -$354.61 per monthI do have enough savings to take care of the 5% down payment, closing costs, and water heater issues, with enough of a reserve left over for 4 months of full mortgage payments, just in case it takes a long time to screen a good tenant.