Having cash reserves is super important in real estate investing to handle unexpected expenses like vacancies or repairs.
The speaker shares a personal story about losing rental income during the 2008 financial crash due to insufficient reserves, leading to property losses.
A good rule of thumb is to have at least $10,000 saved for your first property to cover upcoming costs over time.
For multiple properties, gradually increase reserves, aiming for 10 – 20% of your total property value as a long-term goal.
Some investors hold as much as 50% in cash to seize great investment opportunities quickly.
Having healthy reserves not only helps cover expenses but also makes you look more bankable to lenders.
