Newbie - Setting up bank accounts

[Marc-Andre Bordeleau]

Hey guys,

I'm about to close on my first property and the realization is finally starting to kick in. I need to get my stuff together.

So I was wondering, for those who have one or many rental properties, how do you have your bank account(s) set up. 

Do you simply have a checking account for each property? Depositing all rental income into it and having all your expenses being transferred out from said account? Do you pull out the cashflow remaining and transfer it into a separate account? Do you transfer the money you set aside for your repairs and maintenance into an other account?

Just want to know what is common practice with experienced investors and what isn't.

Thanks

[Brendon Woirhaye]

I use three.

#1 is my main checking account.  I keep a couple months' operating expenses in there, and deposit rents checks and cozy payments to it.

#2 is a secondary account where rents are deposited by one or two tenants who deposit at the bank.  I move monies out soon afterwards.  

#3 is a brokerage account where I'll move excess cash to build up for the next purchase

I don't know how common this practice is or not.  Some states require that landlords keep security deposits in a separate escrow account, but not my state so I don't.

I do not co-mingle personal and real estate funds.