Business account or Personal account

[Michael Thomas]

I’ve always had this concern do u need a business account bank account  or you can use your personal account bank to do real estate investing. Do u need a create a different account if u put a property under an entity?

[David M.]

@Michael Thomas

Basically.. You need to speak with a professional about this probably.  Do you do your own tax returns?  Do you do your own bookkeeping?  They tend to go hand in hand.  But, if you do your own bookkeeping and can properly sum up all your numbers, then its just a matter of handing over the summary to your accountant or whomever prepares your taxes.  This is how many people get into using Quicken.  If they do their bookkeeping in that software line, then their accountant can see their accountants and prepare their taxes.  Not the only way to do it..

As far as costs, it sort of depends.  In NJ, its about $125 or something to register online and another $100 something annually.  You need to figure out some of the NAIC codes and whatever, but you could be done in 5-10 minutes...  Same with getting the EIN next with the IRS; that is all done online.  With your Cert of Formation that you print out, you can go to the bank and get a business checking account.  Depending on your bank, you can get the most basic checking account for no fee if you leave a $500 or $1000 in it.  Pay for some checks and off you go...  This is the MOST SIMPLEST, basic way to start, not necessairly the the most thorough or complete.

But again, you need to make sure you operate the LLC as a separate entity from yourself and don't use it as your alter-ego. Those are two sure ways to pierce your corporate veil to my understanding. Remember that legal entities such as a LLC are not eligible for conforming residential loans. So, if you plan on taking Title to a property with the LLC, you need to use commercial financing (there are plenty of other discussion threads on that, many of which I've posted).