Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here
Pick markets, find deals, analyze and manage properties. Try BiggerPockets PRO.
x
All Forum Categories
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

All Forum Posts by: Austin Farsai

Austin Farsai has started 9 posts and replied 22 times.

Post: landlord bank account for property

Austin Farsai
Pro Member
Posted
  • Rental Property Investor
  • Brentwood, CA
  • Posts 22
  • Votes 12
Quote from @Nathan Gesner:
Quote from @Austin Farsai:

Hello I am currently setting up a bank account with my ADU that I am renting out. I am curious if there was a bank or app that you guys have used to keep your accounts separate, what kind of account, and how easy was it to withdraw, etc.? I want all my rent and deductions for maintenance etc. to be drawn from this account. Thanks!


You need two accounts: checking and savings. If the properties are split into more than one LLC, then each LLC will need its own accounts.

Checking: collect all income here, then use it to pay bills. Pay the mortgage. Pay for maintenance. If you are setting aside funds for capex, taxes, insurance, or other expenses that don't occur monthly, transfer those funds to Savings each month and hold them there until it's time to spend them. You will receive the security deposit in Checking but then transfer it to Savings.

Savings: Hold the deposit here so it's separate from operating funds. You can also hold money for maintenance, capex, taxes, insurance, or other projected expenses. When a tenant moves out, transfer the deposit back to Checking so it's ready to apply towards expenses or refund the Tenant.

If you end up with excess funds in the Checking account, I recommend you transfer it to a third account designated explicitly for future investments. That ensures you don't spend it on other things and know exactly how much you have to spend on the next purchase. If mixed in with your deposits and reserve funds, you may accidentally spend money you shouldn't have. 


This is perfect thanks for the advice. This as of now is only one property and don't have it under an llc would you think that would be the best route?  My city is making me register property management company in order to be landlords or would I open the bank account under that business name? Thanks again. 

Post: landlord bank account for property

Austin Farsai
Pro Member
Posted
  • Rental Property Investor
  • Brentwood, CA
  • Posts 22
  • Votes 12

Hello I am currently setting up a bank account with my ADU that I am renting out. I am curious if there was a bank or app that you guys have used to keep your accounts separate, what kind of account, and how easy was it to withdraw, etc.? I want all my rent and deductions for maintenance etc. to be drawn from this account. Thanks!

Post: Sellers financing on 4 unit building

Austin Farsai
Pro Member
Posted
  • Rental Property Investor
  • Brentwood, CA
  • Posts 22
  • Votes 12
Quote from @Nicholas L.:

@Austin Farsai

what are the numbers


Post: Sellers financing on 4 unit building

Austin Farsai
Pro Member
Posted
  • Rental Property Investor
  • Brentwood, CA
  • Posts 22
  • Votes 12
Quote from @Marco Bario:

Talk with the Seller. Build rapport, discover why they’re selling and  problems they’re trying to solve.

Tired of management? Wanting to minimize cap gains? Property needs repairs or updates? 

You can’t craft an offer that solves their problems - one they’re likely to accept - until you understand the problems they’re trying to solve. 


Awesome thank you Marco! 

Post: Sellers financing on 4 unit building

Austin Farsai
Pro Member
Posted
  • Rental Property Investor
  • Brentwood, CA
  • Posts 22
  • Votes 12
Quote from @Ko Kashiwagi:

Hi Austin,

I recommend Jerry Norton and Pace Morby to learn the basics. Attorneys can also help draft contracts. Investor friendly title companies can also help you, and sometimes they provide contracts they have used. Happy to help further.

Thank you ko I can’t find a solid answer either in obtaining the property there is a listing agent but not sure if I need a purchasing agent for the property. 

Post: Sellers financing on 4 unit building

Austin Farsai
Pro Member
Posted
  • Rental Property Investor
  • Brentwood, CA
  • Posts 22
  • Votes 12

Hello I was looking at some market leads and came across a sellers financing multi family unit. I currently have a primary home with rental unit and was looking at getting into out of state. As I found this property I wanted to see if anyone had experience with creative/ sellers financing and was seeing if I could get in contact with anyone with experience thank you! 

Post: Business strategy information for rental property

Austin Farsai
Pro Member
Posted
  • Rental Property Investor
  • Brentwood, CA
  • Posts 22
  • Votes 12
Quote from @David Lutz:

@Austin Farsai   Hey Austin.  -- this is just the opinion of someone who's done a lot of research and works in a related field.

LLC upsides - the can limit your legal liability if you're sued

LLC Downsides - you have to keep all of the money total segregated, they increase your operating costs and complexity, they increase your costs to borrow, they can be legally challenged and pierced - particularly if you make any miss steps.

Umbrella Policy - it's cheap to get a large commercial umbrella policy, and it keeps your operating model simple (with everything under your name). I'm looking into whether trusts or an LLC makes more sense as I continue to grow my portfolio, but it didn't seem worth the complexity with less than 10 properties.

-- I don't have an opinion on the tax aspect of things. I've been unsuccessfully looking into ways to reduce my active income with a passive business, but it looks like you're on the way to becoming a RE Professional!  (best of luck with that).

-- If any attorneys think my comments on LLC are off base let me know. I talked to a lot of folks at this point and haven't heard a compelling argument for going with an LLC over a large umbrella before you've hit the freddie/fannie ceiling on 10 mortgages.

Best,

David

Hey David, I appreciate the help on this I think I will not waste the time and efforts looking at LLC etc. for the time being until I hit a certain amount, I will still get a hold of an attorney and or CPA to talk over the tax stuff, but the umbrella coverage does seem like the right path for now. Thanks again. 

Post: Business strategy information for rental property

Austin Farsai
Pro Member
Posted
  • Rental Property Investor
  • Brentwood, CA
  • Posts 22
  • Votes 12
Quote from @Katie Balatbat:

@Austin Farsai

You have a lot of questions circling at the same time.  Are the properties in CA?  Be careful with the rules about managing real property in California as traditionally you may need to be an owner or a licensed professional to manage in CA or similar exceptions.  You may also wish to look into the tax consequences of holding real estate in an S-corp.  You'll likely find several hours of personalized advice from an attorney to be worth your while in understanding the big picture before moving forward too much.

*This post does not create an attorney-client or CPA-client relationship.  Readers are advised to seek professional advice.  The information contained in this post is not to be relied upon.

yes, it is, and I appreciate the insight I think after looking at everything just bundling everything in an umbrella makes the most sense and talking with an attorney for the tax stuff to really keep everything legit. thank you again! 

Post: Business strategy information for rental property

Austin Farsai
Pro Member
Posted
  • Rental Property Investor
  • Brentwood, CA
  • Posts 22
  • Votes 12

So I had a number of questions go through my head and haven’t found the right person to explain this if anyone could help me out. I have a rental property that I am the owner of and was wondering what is the best strategy to go with is is create an llc and then business license under that to manage the rental and for taxes go with an s corp or would I not do an llc just create a business and business account get an umbrella coverage and for taxes declare an s corp? If anyone has anyone that I could talk to or know who would be able to answer questions like this I would greatly appreciate it. I plan to scale up and own multiple rental properties and manage until I can get a property management company. Thanks for all the help! 

Post: First house hack in the east bay area

Austin Farsai
Pro Member
Posted
  • Rental Property Investor
  • Brentwood, CA
  • Posts 22
  • Votes 12
Quote from @Ryan Thomson:

@Austin Farsai nice! Screen your tenants like you suggested. I got umbrella insurance up to my total net worth to protect myself. That could be another idea and its quite cheap. 

Sweet some good ideas! How do you interact with tenants. Do you usually just be upfront of being the landlord as well or another renter? Haha or just it go left unsaid ?