Keep Rental Property Reserves Separate From Refinance Cash

By Don McClain | Founder & Principal, Medro Advisors. For a non-owner-occupied one-to-four-unit rental property, distinguish closing funds, restricted reserves and money available for ongoing operations. Include repairs, turnover and the timing of rent receipts in the review. Commercial-property analysis does not establish a rental program’s DSCR or reserve requirements; confirm the actual provider’s terms. Start with current property facts and the cash needed after closing, without assuming a threshold or approval.

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