All Forum Posts by: Carlo D.

Hey @Carlo D. - firstly, congrats! 

Secondly - It boils down to how you want it. Most organized landlords I know plan on keeping things separate. 

I recommend two accounts: checking and savings. If you have an LLC, the accounts should be business accounts in the name of the LLC. If you have more than one LLC, each LLC should have its own set of accounts.

Checking: Collect all income here, then use it to pay bills, the mortgage, or 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.

@Carlo D.

We have a separate account for both maintenance, as well as escrows for taxes and security deposits.  We transfer a preset amount of money into the maintenance account at each month - usually about $100-125/unit.  For us this works out to about $4,000/month.  We also track all of our self-paid insurance and property tax expenses for paid off properties and also transfer 1/12 of that money every month as well for the year.  That way when it is time to write a $40,000 check for property taxes in November, the money is sitting there waiting.  Likewise, with insurance policies for paid off properties the money is always there.  If you leave it in your main account, you don't really have any idea how much of that is not spendable at any given time.  By having the repairs & maintenance in a separate account it gives us a gauge of how much we are spending on repairs.  If the account is growing, we are spending less.  If it is shrinking, we are using it faster.

All the best!

Randy

Hi Carlo, 

I have been originating private money and commercial notes for close to 10 years. 

My understanding is that you don't need a license to buy any paper (notes). 

You only need a license to originate paper if the loan falls under the TILA RESPA guidelines. Basically, if you are lending on someone primary residence is when things get sticky with disclosure laws, timelines, terms, etc. 

The easiest way to avoid the licensing issues is to simply lend money, or buy paper on investment properties. 90% of the states do not require a license to originate, lend, or buy and sell paper if the subject property is Non Owner Occupied, ie: Business Purpose Real Estate, ie Investment Property. 

That is what all the hard money lenders do, and it allows them to lend nationwide without getting tagged for licensing issues. 

States that do require a license to lend/broker on 1-4 Resi Investment Properties: 

CA, ID, OR, NV, AZ, UT

States that do require a license to lend/broker on 5+ Multi/Mixed Use or Commercial properties:

CA, ID, OR, NV, AZ

**not legal advice - do your own research. 

@Carlo D.  The reality is if you just do one deal, I suspect you are not likely to be "caught".  However if you do It might mean both a loss due to the note being uncollectible or even go to jail for not haeing the apropriate license. Both of these are unlikely but do you want to take that risk?

It also greatly epends on state laws. Yoiu said "Out of state". Well which state? some have strict laws, my guess is some may even have no laws. 

My guess is no one will question you when you buy a note. The problem becomes when you try to collect and someone challenges it. 

I am not an attorney just my experienced investor's guess. 

Hi Carlo,

As you may be able to tell from the previous comments, there's so many ways to connect and truthfully all can work - so you just have to pick (or do all) and do them. Click the agent tab, research on google and call them, ask friends, send the DM, etc. And it's okay to not find the "rockstar" on your first deal. Seasoned investors constantly cycle through PMs, contractors and agents as they do more deals.

Hey @Carlo D. - I'm a broker/investor and run my own real estate company in NYC. 

1 - Yes you can hire a PM for their services without having to make them collect rent. I use apartments(.)com as I don't see the need to hire a PM at this stage of my business. Their website lets me manage leases, repair requests, rental listings, payments, etc. all from one platform. 

2 - Yes connecting my bank account. I don't use any platform that will "hold" my money in their accounts... nor would I want to use them. Why would I have them hold my money when I can have full control over it if they transfer it over to my accounts in 1-3 business days. 

Good luck!