OpEx Reserves
Does anyone have any rule of thumb for budgeting opex reserves? I think 3 months opex is pretty normal but want to see what others do (more or less than 3 months, not based on opex, etc).
In my case this is for significant value add of 1940-1970 vintage MF.
Working capital depends on the deal and business plan - how quickly do you think you can get to a place where you're not worried about needing the reserves barring an act of god? How capital intensive is the deal? etc
I generically underwrite $250/unit. Is it common practice to think of it in terms of expenses instead?
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