Managing bills, income & accounts

[Roman Stefaniw]

Hello all! 

Im new to the real estate game and am excited to get started. I am in the midst of negotiations for my first duplex. I do not have an incorporation yet and do not know if its necessary to get one for my first unit. I was wondering if anyone has any advice on how to manage bills, incoming & outgoing money and accounts. I think this is pretty straight forward for one unit but as i plan to expand my portfolio it seems like it could get complicated. 

For example should I have separate accounts for incoming cashflow? A separate account to manage bills (mortgage, insurance, etc)? A separate account that holds money for "Misc" and "Just In case" scenarios? Or should everything be piled into one account?

I know this is probably a pretty straight forward question but I'm a Neewb. Any pointers or advice would be appreciated! Thank you very much. 

Roman  

[Frank Chin]

I like to keep things simple. I opened a separate checking where I deposited my rent checks and and paid the mortgages. I don't use separate credit cards to make purchases, for the rentals although many people do it. It's a matter of simplicity and all my rental charge receipts go into a folder that I keep track of expenses.

I use Quickbooks for bookkeeping. For a while, I make a monthly expense report for my rentals on a spreadsheet in the same format as expense reports I file with the company I work for. I stopped doing it since I implemented QB.

Thinking back, tracking expenses for one duplex is relatively simple. Once you have the system set up, you can scale up. They didn't have Quickbooks 35 years ago when I started, but today, I would implement it quickly to start tracking things.

Set up a savings or money market fund to put away surplus cash. I let excess cash flow accumulate up to $5,000 in checking before I move money over to savings. Depending on the laws on security deposits, I don't let the savings go below the security deposit amount. In some places you have to deposit security deposits into special escrow accounts.