Should I open a new Bank Account before getting pre-approved ?

[Colby Zeller]

Hello Bigger pockets, Today I have a question regarding on how I should move my capital before I look to buy my first property. I'm looking to househack, and wondering what is the best route to take for my banking purposes. I recently read in a book that suggested I should open a dual checking and savings account, and take the security deposits from my future tenants and store them in the savings account, then use the checking to pay the mortgage or maintenance fees. Right now I have one checking account, and a Individual brokerage account with most of my capital liquidated, Im debating If I should open a new account before I get Pre-approved, or wait until I buy a property to do so. Any information or suggestions would be awesome thanks !

[Greg Scott]

Having a separate account to hold security deposits is a good idea.

Having another account for business operations is also a good idea.

There is zero risk in opening a bank account and it doesn't take that long so you can do it now or do it later.

Good luck

[Ray Hage]

Hey Colby, it doesn't really matter that much when you do it but if you want to be more organized, you could just open up a LLC, get a TIN/EIN # and open up a bank account for it. I would probably just keep the security deposits in the same new account that I would paying the bills with. What is important is that you keep a good accounting of all the rents and expenses (Excel, Quickbooks, etc). This will make tax time much easier.

[Colby Zeller]

Quote from @Ray Hage:

Hey Colby, it doesn't really matter that much when you do it but if you want to be more organized, you could just open up a LLC, get a TIN/EIN # and open up a bank account for it. I would probably just keep the security deposits in the same new account that I would paying the bills with. What is important is that you keep a good accounting of all the rents and expenses (Excel, Quickbooks, etc). This will make tax time much easier.

 thanks for the advice Ray !

[Carlos Scarpero]

The more accounts you have, the messier it is from a lending perspective. Get the loan first and then arrange things for however you want to do it