Baselane & ACH Collection Services

[Sean Relyea]

After receiving payments in cash, check, Venmo, Paypal, and Cash App in the last year, I think it's time to look for an ACH collection service. I've been seeing constant ads for Baselane, which I'm guessing is newer by the bonus incentives being offered and the amount of advertising. Does anyone have experience with it? What would you recommend instead? And for the implementation and testing of these, have people tried to change over in the course of a month or picked a reliable tenant as a tester or something in between?

[Lucas Miles]

@Sean Relyea switch to a professional property management software system, Buildium, AppFolio, etc. These have ACH collection systems build in along with numerous other benefits to make your life easier. 

[Sean Relyea]

Quote from @Lucas Miles:

@Sean Relyea switch to a professional property management software system, Buildium, AppFolio, etc. These have ACH collection systems build in along with numerous other benefits to make your life easier. 

 Which do you use or prefer? My view was that with 8 units it wasn't necessary or didn't justify a cost, but I don't know what I don't know here.

[Venkat K.]

I just started researching Baselane, along with  and Azibo

These apps look very promising and interesting. Look at my post here : Property Management Banking (biggerpockets.com)

Let me know if anyone has experience using especially their banking. I am going to try these out and report back once I talk to them to make sure they are legit

[Drew Sygit]

Look at Rent Redi which is free with a BP Pro membership

[Sean Relyea]

Quote from @Drew Sygit:

Look at Rent Redi which is free with a BP Pro membership

 I did end up pulling the trigger on Rent Redi last night, thank you!

[Tom Gotuzzo]

@Sean Relyea how's it going so far?

[Sean Relyea]

Quote from @Tom Gotuzzo:

@Sean Relyea how's it going so far?

 Mixed results. Seems like the document signing function has given me and a new tenant issues, and the application process was mostly good but the application export to csv isn't great. We'll see how the payment function is in a few days. To do list functions and maintenance requests seem to be working fine.

[Susana Rojas]

Quote from @Venkat K.:

I just started researching Baselane, along with  and Azibo

These apps look very promising and interesting. Look at my post here : Property Management Banking (biggerpockets.com)

Let me know if anyone has experience using especially their banking. I am going to try these out and report back once I talk to them to make sure they are legit

 Hey Venkat - could you let me know what you prefer between Baselane and Azibo? Trying to choose between the two.

[Jamie Banks]

I use Baselane for my portfolio. While it is a newer software and doesn't have certain features like automatic transfers, I really like the software. Apart from ACH, which is free vs. a fee on other platforms, the software also keeps track of property analytics and can create a statement of cash flows (NOI/Net Income views also available) and has export functions to give your CPA come tax time. My favorite feature is the virtual account and virtual card options. You can create a separate virtual account for each unit that will link to your main operating account. As a property manager it's so helpful for me to be able to have separate accounts for each property that I manage.

[Sean Relyea]

Quote from @Jamie Banks:

I use Baselane for my portfolio. While it is a newer software and doesn't have certain features like automatic transfers, I really like the software. Apart from ACH, which is free vs. a fee on other platforms, the software also keeps track of property analytics and can create a statement of cash flows (NOI/Net Income views also available) and has export functions to give your CPA come tax time. My favorite feature is the virtual account and virtual card options. You can create a separate virtual account for each unit that will link to your main operating account. As a property manager it's so helpful for me to be able to have separate accounts for each property that I manage.

Thank you, Jamie. That's a great summary and it sounds like it offers more than RentRedi (without the add-ons at least). @Tom Gotuzzo if you were interested in another update, I'm pretty dissatisfied with with RentRedi at this point. The time it takes for the draws from tenants and then the ACH transfer to you leaves you getting pain on the 7th or 8th of the month, the $1 ACH transfer fee is an annoyance that has drawn some complaints that are as petty as the fee feels, the new tenant application features are sub-par, and I'm not sure how well it properly informs tenants of the additional charge for credit cards as I got panicked texts about the added fee from a tenant already going through some hardship. Has been more trouble than it's worth.

[Vicki X.]

@Sean Relyea I'd suggest you request a demo with both Baselane and Azibo. Baselane's design is good and marketing is awesome. Make sure you test drive their product.  

The same advice about getting the demo for and testing Azibo. After that, make the decision based on what matters for you the most.

I've tested RentRedi myself. It's difficult to use, in my opinion. 
I've also used/tried Hemlane, Turbotenant, Innago.  They all support rent collection.  Happy to share the pros and cons for each.

[Jim Kozlowski]

Quote from @Jamie Banks:

I use Baselane for my portfolio. 

Baseline says users receive the funds in “as little as 2 days”.  Has that been your experience - funds within 2 days? Thx.

[Jamie Banks]

@Jim Kozlowski Yes 2-3 days depending on timing on when the payment was made and if there’s a holiday. Late payments / holidays usually delay things by a day. Checks take 2-3 days to clear as well.

[Bonnie Low]

Quote from @Bhushan Shinkre:

As a fellow real estate investor, I'd like to make you all aware of Baselane's underlying fraudulent banking practices. Quick context: I placed a tenant in one of my units after thorough background checks and collected security deposit + first month's prorated rent via Baselane (bad move!). After moving in, this tenant was nothing but trouble - stopped paying the rent, resulting in eviction and wrecking the place. As part of moving out, this tenant contacted her bank and requested refund of all prior deposits and rents and Baselane obliged no question asked!!! They did not even have a courtesy to contact me and let me know that this is happening. I only figured out after Baselane sent me a stern email demanding the refunded money from me, else they will pursue legal actions such as collections and even putting a lien on the property. I should note that that I was using Baselane's banking service to collect deposit and rent, and had moved the funds immediately to my private bank after I collected (thank god!). So, at this point Baselane is in deficit and is going after me.

By doing all this, Baselane has violated the lease terms and potentially laws of state of MO. Their explanation is that the banking service they use (Thread Bank) and their agreement with Stripe (payments) leaves them with no choice but refund if such a request is made, even though they have records of the tenant authorizing payments via their own platform. Apparently, this is deeply embedded in terms and conditions (fineprint) when you sign up, do you really read through even single line item? (we should, but we are too busy doing all that!).

What happened to good banking practices? If this were a brick and mortar bank (now I switched to one), this would have been flagged to me before the bank took the action of refunding the money, triggering an investigation. I know Baselane is becoming increasingly popular, but I want to make you aware of this ticking time bomb if you're using their banking services for rent collection - if a tenant reneges their part of the contract, they can literally collect everything they paid prior no questions asked.

I'm working with Baselane to negotiate this issue, but they remain stern on their end. I can pursue a legal action against the tenant or Baselane, but this will cost me additional $2-3K in legal fees besides dealing with a loss of at least $5K of rent and damages caused. I feel like I got ripped off from all sides and have no line of sight to recoup these losses.

 I'm trying to better understand what you're saying happened. As I understand it: tenant paid rent through Baselane's portal. Tenant decides to cancel and requests a refund. Baselane issues refund. Baselane is now trying to collect the refunded amount from you? If this were to happen, wouldn't they be issuing a refund via your account, in which case there's nothing else they need to collect? I've never heard of this happening before so I'm curious. 

[Bhushan Shinkre]

Few corrections, tenant simply decided not to pay rent and took further action of asking for refund of all prior payments (legally made via Baselane), which Baselane paid out no questions asked. Since my bank account had no funds (I transfer them fully as soon as rent collections deposit), Baselane basically paid those refunds from their own pocket and now are coming after me to recoup them. This is an extremely unusual practice, never seen this in 15 years of my investing career. Hence, I'm making you and my fellow investors aware that this may happen via Baselane. 

[Jessica Hughes]

Quote from @Bhushan Shinkre:

Few corrections, tenant simply decided not to pay rent and took further action of asking for refund of all prior payments (legally made via Baselane), which Baselane paid out no questions asked. Since my bank account had no funds (I transfer them fully as soon as rent collections deposit), Baselane basically paid those refunds from their own pocket and now are coming after me to recoup them. This is an extremely unusual practice, never seen this in 15 years of my investing career. Hence, I'm making you and my fellow investors aware that this may happen via Baselane. 

I had something similar happen through apartments.com. 

I had a tenant using their portal to pay rent. They had been keeping the account a month ahead and one month, about 10 days after depositing, flagged it as fraud to get it back because they were short in cash. Apartments paid it out and came after me about it.

Fortunately the tenant wasn't a huge problem and paid it back on the 1st (i told apartments they could just wait and get over it), but I could easily see it could have ended up more like your situation. Seems to be an issue with 3rd party processors 

[Bhushan Shinkre]

I believe so, Jessica - this is where 3rd party processor based digital platforms fall flat. If you have a nasty tenant like I did, you are SOFL. I'll be taking up with Baselane leadership team and will fight it to fullest extent. Baselane charges a small fee to do direct ACH to your preferred bank, but why not just set up recurring payment directly with your brick and mortar bank? That is what I'm doing now, with just tracking in Baselane. 

[Bonnie Low]

Quote from @Bhushan Shinkre:

Few corrections, tenant simply decided not to pay rent and took further action of asking for refund of all prior payments (legally made via Baselane), which Baselane paid out no questions asked. Since my bank account had no funds (I transfer them fully as soon as rent collections deposit), Baselane basically paid those refunds from their own pocket and now are coming after me to recoup them. This is an extremely unusual practice, never seen this in 15 years of my investing career. Hence, I'm making you and my fellow investors aware that this may happen via Baselane. 

 Thanks for the explanation. I don't accept credit card payments for this very reason. It now makes me question whether other platforms, like Avail, are also allowing the tenant to pay via credit card and we as landlords are just unaware of the mechanism because it's a side of the transaction we don't have visibility into. I'll definitely be looking into this further. 

[Bonnie Low]

Quote from @Bhushan Shinkre:

Few corrections, tenant simply decided not to pay rent and took further action of asking for refund of all prior payments (legally made via Baselane), which Baselane paid out no questions asked. Since my bank account had no funds (I transfer them fully as soon as rent collections deposit), Baselane basically paid those refunds from their own pocket and now are coming after me to recoup them. This is an extremely unusual practice, never seen this in 15 years of my investing career. Hence, I'm making you and my fellow investors aware that this may happen via Baselane. 

As a Baselane user and fellow landlord, I really want to understand how this went down and what I can do to protect myself. I really love Baselane’s features and have always found them to be responsive and considerate. At the same time, I don’t want to open myself up to risks that can be avoided. I’d like to ask @Saad D. from Baselane to weigh in. Is this issue specific to Baselane or is this something broader that affects other platforms as well? I’m always looking to implement best management practices so what can I, as a landlord, do to protect myself when accepting online payments? I don't see any scenario in the future where I don't have to accept some type of online payment, especially because I manage most of my properties remotely and I cater to midterm guests who are usually not in the area when they're sending in their deposit and first month's rent so I HAVE to be able to accept online payments. Virtually no one uses paper checks these days and those have their own issues. So what is the answer?

[Bhushan Shinkre]

@Bonnie Low - totally, I want to find the right landing spot with this issue with Baselane. As a user, I love the Baselane platform and was happy with it, until this ugliness revealed itself. I'm aware of your investing initiatives as we are part of the MTR investor group that meets every Friday, which is excellently run by you. I strongly believe that with 100% digital collections done via Baselane (including security deposit collection) and it's banking service is such a risky value proposition for investors like you and me, as at some point these type of situations will always happen ... and no one else is on the hook other that you as the owner / landlord. We do our best to run our businesses honestly and expect the same from rent collection / banking platforms such as Baselane. If they are going to refund even security deposit no questions asked and unbeknownst to you, why even offer that as a feature / service as part of digital collections to landlords? In fact, by doing so, you're breaking the lease terms by blankly refunding security deposits. The interesting part of all this is that Baselane has digital record of all payments (rent, security deposit) authorized by the tenant on their platform, and they are reverting all collections because of whatever claim a tenant makes as part of reversal?  

[Drew Sygit]

Similar issues happen with VRBO and Airbnb electronic payments:(

[Frans Calderon]

I've been using Baselane for rent collection for about 6 months now, and I've been extremely satisfied with it. Before Baselane, I was dealing with a mishmash of payment methods, including cash, checks, Venmo, PayPal, and Cash App. It was a nightmare to keep track of everything.

Baselane has simplified my rent collection process significantly. The platform is easy to use for both me and my tenants. They can easily pay rent online, and I can track all payments in one place. The ACH collection feature has been a game-changer. It's automated, secure, and reliable.

[Frans Calderon]

Baselane is a popular option with some good features, but definitely newer. Alternatives include Stessa (free) and Buildium (more robust, pricier).

For testing, a phased approach is generally best. Start with one unit or a reliable tenant, then gradually expand. This minimizes disruption if issues arise.