Bank Accounts for Buy and Hold Strategy? Starting Out

[Damon J.]

From what I have read I should have an account for security deposits and an account for rent and expenses that are separate from my personal account. Assuming I will be targeting 10 properties here are a few questions I have:

1)Do these accounts have to be setup as "business accounts"? What are the negatives to setting up personal accounts?
2)When purchasing the home should I fund business account with my personal account for the down payment? Is it incorrect to pull these funds directly from my personal account for closing?
3)Is there any need to open an account for eac property? Seems that one account would suffice with the proper accounting per property.
4)If I am going to first purchase these properties in my name but later have them setup in an LLC that will be created at a later point, how does this effect the account? Once the LLC is setup can I add the LLC name to the account in place of my name or have both?

[Bryan Hancock]

1. I would recommend setting them up that way...see below
2. Put the money in your business bank account and fund the down payment out of that account.
3. I find that separating them is helpful to see what is making and what is consuming money
4. Don't set up the account until you purchase the property. Fund the down payment out of your operations account for the entity that will later be on title