Info For Setting Up LLC Business Account: Is Online Or Local Bank Better
Member since 2023 · 5 posts · 0 votes
My husband and I have an LLC for real estate investments. We have a business account with a local bank but we are looking at options that might be better for a real estate investment business as an LLC and that earns a higher yield. We are new and have one property right now but want to find an option that will grow with our business. As I have been researching options I have found lots of online options (Lili, Bluevine, etc.) but I am curious if it makes more sense to go with a local brick and mortar bank. I'd like to get feedback from your experiences with online and/or local options. Thank you.
Hey Kristin,
Congrats on setting up your LLC and diving into the world of real estate investing! It sounds like you're off to a great start, and I totally get where you're coming from when deciding between an online bank or sticking with a local one. I've helped a lot of new investors like yourself navigate this decision, so let me share a bit of what I've seen.
A local bank can be great if you value face-to-face relationships. For example, I had a client in Austin who worked with a small, local bank. When they ran into a snag with their second investment property (something about a zoning issue, if I remember right), the personal connection they had with their banker saved them a ton of hassle. The local banker pulled a few strings and helped them secure a short-term loan while things got sorted out. That’s the kind of personal touch you don’t always get with online banks, especially when the going gets tough.
On the other hand, online banks are crushing it when it comes to tech and ease of use. I’ve seen many investors move their business banking to platforms like Bluevine because of the higher yield accounts and super convenient interfaces. One of my friends (who’s got a few rentals in Phoenix and San Antonio) switched everything over to an online bank a few years ago. She loved the fact that she could manage everything from her phone, but what realy sold her was the better interest rates. Plus, she didn’t have to deal with business hours.. if something came up at midnight, she could take care of it.
That said, there’s no perfect answer. For you, it might come down to how much you value in-person relationships versus getting a higher yield and the flexibility of online platforms. If you’re planning to scale up your investments, you may want to find a bank that grows with you. Some investors keep a foot in both worlds, using local banks for certain things (like larger loans) and online banks for everyday transactions. It’s worth chatting with your local banker and comparing that with what you find online.. I’ve heard good things about some of the newer online options, but make sure they can handle the complexity of a growing real estate business.
I had a friend in Scottsdale who ran into an issue with her lenders when she tried to close on her second property. Luckily, she had a solid relationship with a local banker who knew her portfolio and worked with her to get things sorted.. She told me that if she had been with an online-only bank, that extra level of help might not have been available when she really needed it.
Anyway, I’d love to hear how you decide to move forward. Real estate is all about finding what works best for you, and I’m sure you’ll find a solution that’ll help your business grow!
- Jasper / Pat Aboukhaled
Turning investment visions into reality in Phoenix, AZ - Ranked #1 for residential real estate growth and opportunity by PwC
Oh my gosh, Pat thank you. It's so helpful to see actual examples of each. Such a huge help! Thank you so much for the reply. After reading this, I am thinking online for day to day stuff and maintaining our relationship with the current local bank where our our account (both business and personal are) for lending.