Key Takeaways
- Maintain 6 months of property costs in liquid reserves for each investment property.
- Stress-test every deal under pessimistic assumptions: 10% vacancy, 55% expenses, 1% higher interest rates.
- Create a standardized due diligence checklist with hard go/no-go criteria at each stage.
- Establish proper legal structure and insurance coverage before acquiring your first property.
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Test Your Knowledge
1.What is the recommended minimum cash reserve per investment property?
2.Under what scenario should a deal still generate positive cash flow?
3.Why should investors consider LLC ownership for rental properties?