I look at every client individually. For example, I just took on a young Idaho couple recently. They are currently under contract for one property. They currently have cash reserves of $12,000 AND a $20,000 HELOC earmarked also for Sominex duty. I’m a little protective of young people with kids.

I also started a middle aged lady, divorced, with no kids at home with $50,000 in the bank. She’s a hospital administrator, making less than $50,000/yr. She now owns four investment properties. Because she’s not making say $80,000 a year, and totally on her own, I’m more comfortable erring on the side of too much than too little.

No real rule of thumb though – except having too much rather than too little.

I like the “Sominex Account” idea…I’m going to have to use that one!

Do you have a rule of thumb for Sominex accounts?
Most lenders these days require 4-6 months PITI. Do you go further?

The ending to this spin cycle is a tumble in the dryer, conveniently set on ‘cottons’.

You can find those rare gems with solid location and higher than normal rent to price ratios – but then you have to listen to guys like yourself who’ve done three other deals in less than half the time.

1. For me, if the house pays for itself that’s all I care about. My earnings are delayed but should be sizeable.

2. There seems to me to be a direct correlation between large cash flow and large tenant headaches. Because usually, not always, great cash flow with little leverage means substandard neighborhoods. I better stop. I’m making some people mad, I can feel it.