Hi All, I am in the process of closing on two SFR's in upstate NY. I am putting them under the same LLC. I was wondering if I could get some advice about the following:
1) How should I set up bank accounts for these?
2) Does anyone know if it is possible to set up two checking accounts under a business checking/savings with my LLC?
3) I have an existing LLC, I used Chase to open my business LLC and checking, but should I go to a local bank that is closer to the properties or does that matter?
I imagine having separate checking accounts for each property so that all income and expenses are tied to each property to make taxes easier, expense/repair tracking etc. There will be no mortgage or hoa expenses so I won't have much need for auto-payments I would think. Then have one savings account where the security deposits are held for each property. Curious to see how others have structured this with 2 properties that are under the same LLC.
Any advice would be appreciated on this, thanks experts!
@Toby Gingold Let's start with your goal: Make taxes and trackng expenses and repairs easier. Having separate accounts can help with this if you are disciplined about keeping all debits and credits separate. Then you know if it came out or went into account A it is for property A. But that is about it. It is really about keeping good records. A bank account is just an abstraction. The bank doesn't physically separate your money out. You can do the same thing and keep your own internal accounts.
Enough for that. If you are opening accounts, open them wherever it is convenient for you to bank. It does not have to be near the properties.
@Toby Gingold yes, you can have MANY accounts for the same LLC. If I were you, I'd set up:
1. checking account for each to keep the books clean
2. a savings account for each to put money aside for taxes and tax return prep
All the best!
Toby, not sure what your long term goals are but if you continue to purchase more properties can you image having that many checking accounts ? Totally unnecessary. You do however need to be able to separate income and expenses for each property. I use Quickbooks to do that. I would recommend 1 account for your security deposits and 1 checking account with the right software to track everything. I currently have over 50 properties with 5 renovations going on at the same time and I have no problem tracking every penny of 6 different LLCs.
Feel free to contact me directly for additional info.
That makes sense, I would like to streamline everything, I will look into Quickbooks. Also saw Brandon Turner offers an excel from his property management book which I am going to look at as well. Will DM you for any other questions, always like learning other peoples systems / structures. I appreciate your response!