Bank Account Allocations

6 Replies

Hello BP.

Hope everyone had a wonderful holiday. One of my NYR is getting more involved with REI and BP forums, so here it is.

How do you guys manage your REI bank accounts?

From what I understand from previous discussion, I should have at least four accounts for:

1. Place where tenants send their checks

2. Security Deposit

3. Cash Reserve for Expenses

4. and maybe for future investment reserve (for down payment etc)

Now my question is how do you keep track of all this? If you have one or two properties this doesn't seem to be challenging, but how people with 50+ properties keep track on expenses? Is there any software available to assist with this kind of task?

Originally posted by @Roy C. :

Hello BP.

 but how people with 50+ properties keep track on expenses? Is there any software available to assist with this kind of task?

My wife keeps separate accounts for each property & it works for us...esp when you have to the pay the respective property taxes, repairs, mileage etc etc. 

Furthermore, it's much easier for the accountant to correlate for the year end financials. 

@Roy C.  

We have separate checking/savings for each property.  It keeps the deposits separate and the security deposits separate.  I also have a "rental checking" account.  That account is used for acquisitions and rehabbing.  That's my budget account. No matter what, that's what I get to spend on the latest purchase.  Also, when applying for a loan I only show that account so I don't have to chase endless paper trails for the lender.  

@Pat L.   , @Bryan N.  

 Thank you very much for your response. I see, so having separated accounts for each property work for you guys. My concern is keep tracking on all those bank accounts for each properties. Would you continue to implement this method as your portfolio grows? 

Originally posted by @Roy C. :

@Pat L.  , @Bryan N.  

 Thank you very much for your response. I see, so having separated accounts for each property work for you guys. My concern is keep tracking on all those bank accounts for each properties. Would you continue to implement this method as your portfolio grows? 

 we are well above 50 properties & online banking allows a complete rundown of all accounts on one screen. In fact my wife is clicking/reviewing the accounts now as she watches NCIS.

With partnerships & other LLC groups we are into we keep those specific accounts at a different bank.

Originally posted by @Roy C. :

@Pat L.   , @Bryan Neal 

 Thank you very much for your response. I see, so having separated accounts for each property work for you guys. My concern is keep tracking on all those bank accounts for each properties. Would you continue to implement this method as your portfolio grows? 

 I don't see why not.  Plus, it keeps the security deposits separate.  So, if for some reason you get challenged in court or anything else you can show separation of finances.  There may probably a better system but this works for us. 

I have 1 account for my 7 rentals. The credit union set up the savings account for me with separate drop down accounts for cap ex, vacancy, taxes, insurance and security. I manage all with online banking and a excel spread sheet I made. 

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