Hi guys, so I’m fully renting out my first multi family property and now I’m living in my second multi family property (house hacking). I have separate checking and saving from my personal life which comes from 9-5 day job. And now I have 3 separate accounts for my rentals. Checking for paying mortgage, Saving for money I actually make, Saving for security deposit. I have a credit card from capital one that I will be using to pay for repairs or other expenses, that’s will be kind of like my business card. I know I won’t be making much money since I’m house hacking for now. But can I pay the capital one from my personal checking account at the end of the month??? I’m technically using my credit card as my buisness card for the rentals but I’m actually paying it through my personal checking at the end of the month. Is it ok??? Or do I have to keep depositing money from my personal checking to my rental checking account to pay it??? Either way I still have to use my personal checking account since I won’t be making much money this year. I truly appreciate your time reading this. Thank You!!!!
@Danny Sok it sounds like you are considering, continuing to pay for repairs and other expenses from what sounds like your personal credit card. I mean unless the intrest rate is that low and you feel comfortable. That's probably the only way I would suggest it. I mean granted I'm no mathematician, I'm a carpenter. Haha. But just thinking about it, you want to use the money you are making from the rentals(a cap ex budget) to pay for repairs and other things in the property. Scale is amazing, with a team, but time consuming when you're going at it by yourself and you dont want to stretch yourself too thin. Your 9-5 money should be being saved for the next one,yes. And really, paying down what mortgage/balance is left. I personally wouldn't feel ok with using my own personal credit card or money to do repairs and things in that realm unless there's a real dire need.
@Danny Sok I mean I'm thinking about it more and I understand that you kinda have to pay for the stuff this way. Out of pocket with your 9-5 job. I dont know. Maybe it's the idea of the personal credit card being used that doesnt right with me. And I say that because you said its "kinda like" a business card. Those were things I'd probably do, that I mentioned. Are there people you can pool resources with to have that not be such a hit to you? Consider a construction loan from a bank? Financing from a contractor?
@Danny Sok - I would add that it would be in your interested to open a business credit card. Keep those expenses separate for organizations sake, and also give the opportunity to build more credit by dutifully paying off both cards (make sure you can do that!).
Good luck! Also, before your business grows it could be worth seeing what you can learn for free on good bookkeeping practices.
I appreciate the responds but I sort of really never got an answer. As of now ... my first property will break even with my tenants since I have my in-laws paying for everything. So first property has no positive cash flow. Just break even. Second property which I will be living with a tenant so technically I’m paying half the mortgage and the tenant pays the other. So second property has no positive cash flow. I have already have a personal account(9-5 job)and business account(rental properties)setups already. Since my buisness account is negative in cash flow and if I have to pay mortgage and repair. I technically have to pay out of my pocket since I’m negative in cash flow right now. what’s the actual proper way of paying for my business account if I’m negative in cash flow in that account???? Truly appreciate your responds!!!! Thanks again
@Danny Sok It does not matter where the money comes from. Just keep good records of what your actual business expenses are for tax purposes. The IRS and no one else cares about which account the money comes from.
Dawn you are awesome!!!! Thank You!!!!
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