“You actually have to put in three months of reserves, and that's what the debt service is paid from.”
JW
Jason Williams
Ironclad Underwriting Podcast ·
Jason Williams · Ironclad Underwriting Podcast · Why Monthly Cash Flow Matters More Than Annual Averages
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Sets reserve levels at three to six months of operating expenses plus debt service
3-6 months of operating expenses and debt service
“You actually have to put in three months of reserves, and that's what the debt service is paid from.”
“You can't have that conversation one to three months out… you need to have it six to 12 plus months out”
“It's a simple formula. And what it is, is it calculates a ratio, a number that takes your net operating income divided by your total annual debt service, your debt payments, and it gives you a number that can be used to compare.”
“The shelf life for a frozen pie is about three to six months. I always put my best before dates in the three month range”
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