All Forum Posts by: Alexi Schreier

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $68,000
Cash invested: $21,000

2bd/1bth
purchased off MLS
5K rehab needed, negotiated for the seller to pay for it at closing.

What made you interested in investing in this type of deal?

It was a straight forward "classic" buy & hold deal. Perfect for getting my feet wet.

How did you find this deal and how did you negotiate it?

MLS. The inspection came back with some damage to the roof. Seller agreed to cut me a check at closing for the amount that my contractor bid the repairs at.

How did you finance this deal?

Conventional 30-year fixed loan.

How did you add value to the deal?

N/A. Not a value-add deal. The next one will be :)

What was the outcome?

A cash-flowing rental property, many new connections made, and lots of courage to take on more deals and expand my portfolio.

@Andrew Postell Thank you for this glorious post.

Hey all,

I'm in the process of buying a home in a different state from where I live and would like to keep my personal funds separate from my rental funds. I'm looking at different options for opening a business checking account for this purpose.

Are there any obvious downsides I may be missing in going with an online-only bank like BlueVine? I like them because they have no fees and I don't need to walk into a branch in person to open the account (since they don't have brick+mortar branches). You still get all the regular things that come with a checking account: debit card, checkbook, ATM withdrawals, etc.

I figured it would be a quick and easy way to set up a business account and avoid fees but I just want to get some feedback in case I'm missing something.

Are there any advantages in going with big-name banks (most of which do charge fees) that I would miss out on if I were to go with an online-only bank?

I did not know this, thank you for bringing it up and for the detailed response.

I didn't realize it exposed you even further to third parties that may go after the PMC!

@Bob Stevens greater Cincinnati area

@Bob Stevens unfortunately that really is what they wanted to do: have me open a business checking account and bring them on as an authorized signer having full access to all funds in the account...

@Greg Weik sound advice, thank you. There are a few points in your response that I wasn't doing yet that I'll start doing going forward!

@Joe Splitrock true. I see what you mean. I guess it all comes down to trusting your PM regardless of how accounting is set up.

@Joe Splitrock I forgot to mention, even if you only hold working capital in the account with the PM as an authorized signer, what if you hold working capital for 10 or 20 properties in the same account? That's a lot of money the authorized signer has the authority to walk off with.

I guess you could say the same thing for the PM holding the reserve amounts and security deposits in their accounts but again that goes back to my point about checks and balances.

@Joe Splitrock thanks for your input, it's good to see the other side of the story. It is true that the PM company could just never pay you the rents and keep the security deposits in their account and disappear.

I guess the one thing I see differently is that with an authorized signer(s) you are clearly expressing consent to the bank that (a) particular individual(s) can withdraw all of your funds without your permission. There are no checks and balances with the bank. 

When the accounting is done within the PM company's accounts the individuals handling funds related to your property probably have more checks and balances from their peers (assuming we're talking about an actual structured PM company and not a one-person operation).

With regards to the PM company holding your funds and not sending the owner draw until mid-late month I agree that's not ideal. However, there are ways to mitigate that with your own accounting by using the previous months income to pay for the current month's expenses.