Keeping funds separate

3 Replies

I just got an offer accepted on my first Single Family House which I plan to house hack. I ran the numbers through the BP calculators prior to making an offer and everything looks great. I'm wondering what tools or tricks you all employ to keep track of how much is in your "Repairs/maintenance" fund vs your "Vacancy" fund or "Cap Ex" fund. Do you have separate savings accounts for all of those categories? Or how do you keep these funds properly earmarked?

Hey @Adam Weisenburger   congrats on your first contract -- that is very exciting. I personally just keep two accounts per property -- an 'operating account' (checking account) with the aggregate total of reserves I want to maintain for the property. Then, I have a savings account where I hold deposits. I also get a credit card for every property because I love credit card points. 

@Adam Weisenburger , I use on business checking account as an operating account.  I currently use separate business savings accounts for each property for reserves (each business savings account per property is a combination of vacancy, repairs, and capex).  I start them at $0 at my local credit union and build them from scratch via rents.  If I ever have a repair before there are sufficient funds in a particular account, #1 my largest PM will take care of it with their 1-year warranty or 2) I will take it from the operating checking account where all the free cash flow sits (until I have enough to eventually start buying additional properties with it).  I have 5 SFRs right now.  If I get much bigger, I may rethink my system but it seems ro be working for now and let’s me see how each property is looking.