Starting out - Avoid Bank of America

Investor · Statewide, MO · Member since 2011 · 815 posts · 425 votes

Hoping to help some newbs avoid some serious banking pain. This is one of many disasters with this bank that I have been involved with.

I just spent 30 minutes helping my plumber try and get funds from a job.

He deposited my check on 5/1. Funds cleared and were in Bank of America's hands on 5/3. They told him his funds would be available on 5/9. On 5/9 they told him his funds would be available today, 5/10. He also has not bounced checks there and is not a high risk type of account.

Today, they told him they have to verify funds and that they're "doing him a favor" by doing so. Now, we've both lost more time dealing with this. This is over a $4,000 check, not a $4,000,000 check.

Experiences like this are even more reasons why you do not want to work with Bank of America in any capacity, unless you strongly desire distractions, inefficiencies, headaches and heartache.

TLDR: Check clears on 5/3. Bank of America refuses him access to his funds (while being complete jerks) that they have had in their bank for a week. Then makes him jump thru all sorts of hoops to get them, all while presumably charging him fees for the privilege of having an account with them. Do not use Bank of America for anything!

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Joe FunariBusiness Member

Real Estate Agent · Keller, TX · Member since 2017 · 850 posts · 825 votes

@Ed O. First I recommend you change the bank you do business with. Find a true community bank to move your business to. If your exit strategy is Long Term Rentals (LTR) eventually you will have to go to commercial loans to acquire your properties. The FDIC has a search for true "community" banks: https://www.fdic.gov/resources/community-banking/search/cbi-...

Keep in mind there are rules these banks must follow in order to qualify as a true "community" bank. You can do an internet search as to what they are. But suffice to say any major bank, such as BOA, or credit unions I recommend you avoid. Now I can't speak for verifying funds, etc. But now you have some additional questions to ask the community banks that you interview to move your business too. Also, if you let us know where in MO you can ask for community bank recommendations in your area. I work in the Dallas/Ft. Worth area and can recommend one here that has been phenomenal to work with. Hope this helps.

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Kristine Ann
Investor · WNY/CNY/Adirondacks, New York State · Member since 2024 · 151 posts · 133 votes
2y
That sounds very frustrating. It's all within a 5-7 day business day period, which is normal for paper checks and banks. Snail banking.
Honestly, though as long as the funds are in your account, is it really your concern how long it takes the check to clear for the receiver? That doesn't seem like it would be your responsibility.

I personally really like Bank of America for a lot of reasons, but paper checks are always slow.
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Joe FunariBusiness Member
Real Estate Agent · Keller, TX · Member since 2017 · 850 posts · 825 votes
2y

@Ed O. First I recommend you change the bank you do business with. Find a true community bank to move your business to. If your exit strategy is Long Term Rentals (LTR) eventually you will have to go to commercial loans to acquire your properties. The FDIC has a search for true "community" banks: https://www.fdic.gov/resources/community-banking/search/cbi-...
Keep in mind there are rules these banks must follow in order to qualify as a true "community" bank. You can do an internet search as to what they are. But suffice to say any major bank, such as BOA, or credit unions I recommend you avoid. Now I can't speak for verifying funds, etc. But now you have some additional questions to ask the community banks that you interview to move your business too. Also, if you let us know where in MO you can ask for community bank recommendations in your area. I work in the Dallas/Ft. Worth area and can recommend one here that has been phenomenal to work with. Hope this helps.
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Tanner Lewis
Lender · Austin, TX · Member since 2021 · 448 posts · 441 votes
2y
Was this for a rehab on a flip? I suggest going with hard money since that product is more made for rehabs than an institutional bank. Most draw requests are filled in 2 days, but this varies depending on the lender.
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Ed O.
OP
Investor · Statewide, MO · Member since 2011 · 815 posts · 425 votes
2y
I probably should have been more clear. It's been a few decades since I have had an account at BofA.

@Kristine Ann

Is it a concern that my subs get paid - yes. When sub / general relationships are purely transactional, the quality of work and responsiveness crumble. I've worked with many subs over the years. When you genuinely care about your subs, they take much better care of the jobs and work. I've had it both ways and was lucky to have a successful GC teach me this. It's been a game changer.

Bank of America had this man's money for a week - in their account. Yet even a week later, they refused to release funds without calling to verify funds. It's clear they're making a couple of dollars on the float while screwing their customers.

@Joe Funari I don't bank with them. We work with a Regional bank and it's been a good ride. Small banks are the way to go for sure. I appreciate the offer of help.

@Tanner Lewis Just a bread and butter remodel, funded by an investor we work for.
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Kristine Ann
Investor · WNY/CNY/Adirondacks, New York State · Member since 2024 · 151 posts · 133 votes
2y
Quote from @Ed O.:

I probably should have been more clear. It's been a few decades since I have had an account at BofA.

@Kristine Ann

Is it a concern that my subs get paid - yes. When sub / general relationships are purely transactional, the quality of work and responsiveness crumble. I've worked with many subs over the years. When you genuinely care about your subs, they take much better care of the jobs and work. I've had it both ways and was lucky to have a successful GC teach me this. It's been a game changer.

Bank of America had this man's money for a week - in their account. Yet even a week later, they refused to release funds without calling to verify funds. It's clear they're making a couple of dollars on the float while screwing their customers.

I know you just needed to vent, but I can't help giving advice on this. Maybe because I've kind of run into this issue with paying people in the past.
If the vendor needs funds right away and can't wait for a check to clear, you might want to pay a couple dollars to get a cashier's check. Those clear very quickly.
There is also zelle which instantaneously deposits the funds from your checking account to theirs through the bank. You can also write smaller checks more frequently. And there's always a credit card (if he has the problem with 3% fee then he can wait for his dumb check to clear!)
Bank of America doesn't charge us anything. If you have enough money in accounts there, their checking is free, bill pay is free, and they reimburse for all ATM fees. Also their credit cards are the best out there.
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Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @Ed O.:

Hoping to help some newbs avoid some serious banking pain. This is one of many disasters with this bank that I have been involved with.
I just spent 30 minutes helping my plumber try and get funds from a job.
He deposited my check on 5/1. Funds cleared and were in Bank of America's hands on 5/3. They told him his funds would be available on 5/9. On 5/9 they told him his funds would be available today, 5/10. He also has not bounced checks there and is not a high risk type of account.
Today, they told him they have to verify funds and that they're "doing him a favor" by doing so. Now, we've both lost more time dealing with this. This is over a $4,000 check, not a $4,000,000 check.
Experiences like this are even more reasons why you do not want to work with Bank of America in any capacity, unless you strongly desire distractions, inefficiencies, headaches and heartache.
TLDR: Check clears on 5/3. Bank of America refuses him access to his funds (while being complete jerks) that they have had in their bank for a week. Then makes him jump thru all sorts of hoops to get them, all while presumably charging him fees for the privilege of having an account with them. Do not use Bank of America for anything!

Just use Zelle, maybe max is 2k/day per day so do it twice. I never use personal check to pay for project for the same reason only and the subcon can easily get mad because of these. Either Zelle or Cash or Cashier Cheque. It would make things much easier for everyone.
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Lynn McGeein
Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
2y
@Ed O. If your contractor chose Bank of America for their business account then they should have asked about and discussed timing and fees for different deposit types before choosing, ask their clients to use Zelle, or have a separate payment service like one contractor I use has pocketsuite for estimate, payment and invoices. Larger banks can be a pain, but if you know and work within their policies, they can work well.
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Michael S.
Huntsville, AL · Member since 2018 · 577 posts · 864 votes
2y
Agree with @Joe Funari - we only work with local/community banks and regional banks - they are quicker to respond, take a personal interest in partnering with your real estate business to see it have success (which makes sense, because they want you to make good on your loans), and offer much better rates than hard money loans - we don't pay any origination fees, they can even fund in less than 30 days, and interest rates have never hit double digits over the past 2 years.
Now, here's one important point I've learned over the past 7 years - never do business with ONLY one bank (unless you are only buying a property or less per year) - you never know when the bank will lose their appetite for cash out refinancing or construction loans. Always have at least two banks you are active with as far as business account and getting loan quotes. We got delayed on a cash out refinance years ago when the bank's philosophy changed overnight.
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Ed O.
OP
Investor · Statewide, MO · Member since 2011 · 815 posts · 425 votes
2y
@Kristine Ann

Was about 10% vent, 90% notice to newbs to bank elsewhere. Excellent suggestion on cashier's check and this is maybe an area you're not familiar with. Bank of America holds those as well for just as long. I was told this by my sub and couldn't believe it. I called a few bankers I have known that don't know my plumber from the next guy and they too confirmed Bank of America can hold even certified funds in a similar manner. This is how they make a few pennies on the float. I think you're missing the main points here - they HAD the funds from the check in hand for a week and still were refusing to release them, while being complete jerks about it. This is how the bank operates on a regular basis.

@Carlos Ptriawan Good idea on the cashier's check - but Bank of America plays the same game even on those now. Stall, hold the money, refuse to release it as long as possible.

@Lynn McGeein His bank, his problems, for sure. But if he can't work on my job, or can't get gas for his truck when he's waiting on 4k, that BofA has had for a week and is still acting like they don't have it - this impacts us too. He's changed banks to a local/regional as I've told him to do. With that said - and on a serious note - what does Bank of America do good? I know it's not mortgages - I've heard a lot of horror stories about processing done in one time zone, underwriting done 1,000 miles away and appraisal reviews being done in a 3rd time zone and none of them knowing what is going on with eachother. What do they do great?

@Michael S. This is a million dollar point! I've had this happen before. Bank loans on a lot of deals and then the runway ends and we don't find out until we have several contracts and end up in a crisis. Well said.
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V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
2y
I've used BoA for 100% of my businesses, they have never been a problem. That's a long, long list of accounts.

The contractor needs to talk to that branch at BOA and get himself cleared up first, then everything will go smoothly. He also needs to accept electronic, and other various payments. I pay mine 100% of the time via credit card. Never had an issue.

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Allan C.
Rental Property Investor · Member since 2018 · 826 posts · 810 votes
2y
@Ed O. I believe BOA is actually one of the best banks to use as an investor. Their online transfer systems (ACH, wires, zelle) is more convenient than any other banks I’ve come across. Not only can you perform all the transfer functions, you’re not capped on transfer amounts. This was extremely valuable when I lived overseas and needed to fund asset acquisitions and private placement offers, but now it’s just convenient to take care of banking matters wherever and whenever I please.
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Sam YinPro Member
Los Angeles, CA · Member since 2021 · 584 posts · 738 votes
2y
@Ed O.
I think there may be another side to this story that even you may not be aware of. Your contractor may not have a good history with BofA. he may not be disclosing that part to you, which would likely impact the long holds.
BofA, CHASE, Wells, etc... are large institutions that have giant businesses portfolio and are very aware of the importance of timely fund clearances for small businesses. Additionally, ZELLE is instantaneous. I have several reoccurring direct deposit ZELLEs that I send out monthly between $2 to $20K with zero hick ups.
After some of the other responses, I think it's fair to say that it would NOT be prudent to suggest to newer investors to avoid this large bank. I think it would be in the best interest of newbies to establish an account with BofA or other large institutions because they are so resilient and offer great products.
On two occasions last year, I wanted to pool funds to one account in order to send just one wire transfer to avoid confusion to the recipient. I wrote out a few checks to the bank ($15k, $20k, and $20k), that would required a week or more hold. I just asked if they can release it immediately because I need to make the wire cut off in the next 30 mins. They call over the supervisor, she OKs the release, and BAM! Done. The wire sent out and the funds were drawn from my other bank accounts several days later.
It doesn't hurt to ask. But if there was a not so reliable relationship (on the account holders part) it may cause some pause by the bank.
In the end, there is always CASH. It is still king and will have zero hold time for either party, if one refuses to use electronic transfers like Zelle or Venmo.
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Lynn McGeein
Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
2y
@Ed O. For us, National banks are about accessing accounts easily, obtain cashiers checks or get cash most cities we’re in. For instance, NFCU didn’t work for us in Vancouver, WA as nearest branch was in Seattle back then. National bank meant easily transferring funds immediately to kids account free even though they’re in different state, knowing the branch in NC can issue us a bank check for next closing after flying in and learning final amount, paying for new car in Pennsylvania after seeing it and negotiating price, bank branch right down the street. Local banks are great for doing business in specific areas. But a large national bank has its perks, too.
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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
2y
Quote from @Ed O.:

Hoping to help some newbs avoid some serious banking pain. This is one of many disasters with this bank that I have been involved with.
I just spent 30 minutes helping my plumber try and get funds from a job.
He deposited my check on 5/1. Funds cleared and were in Bank of America's hands on 5/3. They told him his funds would be available on 5/9. On 5/9 they told him his funds would be available today, 5/10. He also has not bounced checks there and is not a high risk type of account.
Today, they told him they have to verify funds and that they're "doing him a favor" by doing so. Now, we've both lost more time dealing with this. This is over a $4,000 check, not a $4,000,000 check.
Experiences like this are even more reasons why you do not want to work with Bank of America in any capacity, unless you strongly desire distractions, inefficiencies, headaches and heartache.
TLDR: Check clears on 5/3. Bank of America refuses him access to his funds (while being complete jerks) that they have had in their bank for a week. Then makes him jump thru all sorts of hoops to get them, all while presumably charging him fees for the privilege of having an account with them. Do not use Bank of America for anything!

Have not used them in almost 20 years and never will. same with PNC. We currently use chase, also had good luck withWells fargo as their branch near me had really good people.
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Ed O.
OP
Investor · Statewide, MO · Member since 2011 · 815 posts · 425 votes
2y
Quote from @V.G Jason:

The contractor needs to talk to that branch at BOA and get himself cleared up first, then everything will go smoothly. He also needs to accept electronic, and other various payments. I pay mine 100% of the time via credit card. Never had an issue.

So, this has happened repeatedly to the contractor. When he called me this past time, he was in the bank and while I was on the phone, politely asked the manager to speak with me so I could get more information as to what was going on. He refused and walked away from him.
Just to make sure - you think it is good business for BofA to process and take in funds and refuse to release them to their customers seven days later without obtaining proof of funds from the person paying them??? BofA had the money for a week and still would not release them - this is a good thing?
To be clear: I thought the contractor was possibly being dishonest with me. The story from the sub sounded outrageous and we haven't worked together a lot. After talking to a few bankers, including one with more than a decade at BofA, I can 100% confidently tell you this is how Bank of America treats all of the customers in this location.

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Ed O.
OP
Investor · Statewide, MO · Member since 2011 · 815 posts · 425 votes
2y
Quote from @Sam Yin:

@Ed O.
I think there may be another side to this story that even you may not be aware of. Your contractor may not have a good history with BofA. he may not be disclosing that part to you, which would likely impact the long holds
This was an initial thought - what am I missing? I thought the contractor was possibly being dishonest with me. The story from the sub sounded outrageous - that a bank would do this to a customer. After talking to a few bankers, including one with more than a decade at BofA, I can 100% confidently tell you this is how Bank of America treats all of the customers in this location.
This is commonplace operations for this location. They also do the same cat and mouse game with certified funds as well.
They had funds in hand for a week and still wouldn't release them, while being total jerks about it - demanding verification of funds - money they already had in their hands for a week! That's crazy.

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Kristine Ann
Investor · WNY/CNY/Adirondacks, New York State · Member since 2024 · 151 posts · 133 votes
2y

@Ed O. It's frustrating to be sure. But you need to move on and work with what you have. Bank of America isn't going anywhere. Pay the contractor more frequently so he's not panicking over $4k and remember that banks do this....they all do this (even the local ones).
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Paul Azad
Member since 2024 · 162 posts · 232 votes
2y
BOFA has 3.18 trillion Assets, most earning prime +, so north of 8%, but the bare minimum they would earn would be 5.33% with any cash deposits parked at the FED reverse repo facility, which equates to about $470,816,666 per day in interest, So delaying a digital payment for a week is like 3.5 Billion dollars across its portfolio
And I love that despite tbills going from near zero to 5.4% over last 2 yrs, BOFA/CHASE still paying its depositors the Princely sum of 0.01% on savings accounts. I'm gonna invest that and watch it grow. :)
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Don KonipolBusiness Member
Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
2y
I don’t know what went on in this particular case, of course. But I do know that banks will have different policies depending on (1) how large the customer is; (2) it’s experience with the particular customer; it’s experience with the financing institution upon which the check is written. While I’ve had a few frustrating issues with B of A, the convenience of their online platform, and their available services, have led me to stay.
That being said, I’m willing to bet that the contractor has deposited quite a few checks that were returned for insufficient funds; stop payment; etc. Further, I’m also willing to bet that the contractor’s average daily balance is low; and going out on a limb I’ll bet that he himself has bounced a fair number of checks (probably the result of deposits that were returned insufficient). Banks are businesses; they prefer low risk customers, i.e., business and personal accounts with sufficient reserves to cover checks returned insufficient.
When a contractor or service person I have paid needs the money immediately, and I’ve given them a check instead of ACHing or Zelle the money to them, they go to my bank (B of A) and merely exchange the check for cash. Was this not an option for your contractor?
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Sam YinPro Member
Los Angeles, CA · Member since 2021 · 584 posts · 738 votes
2y
Quote from @Don Konipol:

I don’t know what went on in this particular case, of course. But I do know that banks will have different policies depending on (1) how large the customer is; (2) it’s experience with the particular customer; it’s experience with the financing institution upon which the check is written. While I’ve had a few frustrating issues with B of A, the convenience of their online platform, and their available services, have led me to stay.
That being said, I’m willing to bet that the contractor has deposited quite a few checks that were returned for insufficient funds; stop payment; etc. Further, I’m also willing to bet that the contractor’s average daily balance is low; and going out on a limb I’ll bet that he himself has bounced a fair number of checks (probably the result of deposits that were returned insufficient). Banks are businesses; they prefer low risk customers, i.e., business and personal accounts with sufficient reserves to cover checks returned insufficient.
When a contractor or service person I have paid needs the money immediately, and I’ve given them a check instead of ACHing or Zelle the money to them, they go to my bank (B of A) and merely exchange the check for cash. Was this not an option for your contractor?
My thoughts exactly. Having done many transactions over the years with various institutions, this is the way the operate with their clients. They are hedging their risks against risky clients.
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Ed O.
OP
Investor · Statewide, MO · Member since 2011 · 815 posts · 425 votes
2y
I'm gonna agree to disagree.
Having funds in hand and having had them in hand for a week, and demanding a verification of funds from the paying bank is a rotten business practice.
Assumptions made about the contractor being a deadbeat are reasonable to consider, but again, remaining lost in the thread, is the fact that a banker I work with now, who used to be at BofA - for many years, indicated this is standard and common practice, to hold and stall on releasing funds as long as possible. The banker even knew who the awful bank manager was that was dragging my sub thru the mud on this before I named him.... this is their standard....
They do the same nonsense on certified funds.
My contractor had a check made out to his own company. I don't know my bank's policy on cashing checks for business accounts, but if it was made personally to him, I'm sure they would have cashed it. My contractor has wisely changed banks to the bank I'm at. I'm sure he will have a lot better experience than with the too big to fail bank....
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Henry T.
Member since 2022 · 1k+ posts · 1k+ votes
2y
Stay away from mega banks. Use a local credit union. Same thing here in Seattle with Chase. I have a CR in the 800's. Yet they sit on transactions for a week+. Transfers in other countries are almost instantaneous. Why should they give you your money when they can use it first?. Only in the US this nonsense happens. . Go Credit union!
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V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
2y
Quote from @Henry T.:

Stay away from mega banks. Use a local credit union. Same thing here in Seattle with Chase. I have a CR in the 800's. Yet they sit on transactions for a week+. Transfers in other countries are almost instantaneous. Why should they give you your money when they can use it first?. Only in the US this nonsense happens. . Go Credit union!

What does your CR have to do with transaction times? I am assuming CR is Credit rating unless I am mistaken. If so, that has no bearing. It's all about KYC.
And no, it's not only in the US go check out global means of playing with currency you'll get ****ed harder. Give me a break, you clearly haven't experienced that.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
2y
Quote from @V.G Jason:

Quote from @Henry T.:

Stay away from mega banks. Use a local credit union. Same thing here in Seattle with Chase. I have a CR in the 800's. Yet they sit on transactions for a week+. Transfers in other countries are almost instantaneous. Why should they give you your money when they can use it first?. Only in the US this nonsense happens. . Go Credit union!

What does your CR have to do with transaction times? I am assuming CR is Credit rating unless I am mistaken. If so, that has no bearing. It's all about KYC.
And no, it's not only in the US go check out global means of playing with currency you'll get ****ed harder. Give me a break, you clearly haven't experienced thatI find big banks are fantastic if you have very large deposits.. but for me I like my community bank where i call my personal banker and they handle everything for me over the phone.. I did have one client that was with B of A and he is a very large MHP owner in Orange county CA. And we were bidding on a foreclosure in N> CA and we needed a cashiers check.. went to the counter next thing I know the manager is coming out and taking over.. thats one whale of client they get completely different service.
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V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
2y
Quote from @Jay Hinrichs:

Quote from @V.G Jason:

Quote from @Henry T.:

Stay away from mega banks. Use a local credit union. Same thing here in Seattle with Chase. I have a CR in the 800's. Yet they sit on transactions for a week+. Transfers in other countries are almost instantaneous. Why should they give you your money when they can use it first?. Only in the US this nonsense happens. . Go Credit union!

What does your CR have to do with transaction times? I am assuming CR is Credit rating unless I am mistaken. If so, that has no bearing. It's all about KYC.
And no, it's not only in the US go check out global means of playing with currency you'll get ****ed harder. Give me a break, you clearly haven't experienced thatI find big banks are fantastic if you have very large deposits.. but for me I like my community bank where i call my personal banker and they handle everything for me over the phone.. I did have one client that was with B of A and he is a very large MHP owner in Orange county CA. And we were bidding on a foreclosure in N> CA and we needed a cashiers check.. went to the counter next thing I know the manager is coming out and taking over.. thats one whale of client they get completely different service.
KYC is everything with these big banks. If they know you move, they'll work with you. If you're suspect, they''ll keep it trim with you.
I don't do too many loans with BoA, it's mostly banking, payroll, SB services, etc. My loans, if any, are usually at the credit union/community bank local to the area.
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