All Forum Posts by: Simon W.

Hi @Kolby Knickerbocker where are you looking to invest? 

Quote from @Max Emory:

@Bob Asad, there are a lot of different account structures out there but absolutely keep security deposits in a separate account from your opex/income account. 

It can be a separate checking or savings but just make sure to have a "holding" account where only security deposits are held for your sanity.

I won't speak to liability since I'm not a property manager, attorney, etc. 

Just speaking from a cash flow management/account structure perspective.

As for someone being in the real estate accounting industry for over 2 decades, I can say that State Law compliance is big on this. Legal violations and penalities(fines) even if you have accounting software to track the difference. 

Also, the idea separating them is so you don't accidentally spend them and then no way to pay it back when the time comes.

Some states if you don't refund the security deposit within X amount of days, the penality is that you will have to pay back the security deposit x2. 

I am just going chime in here since most of the things are said by other BP members.

Telling you not to fly/travel there so you can use the money for a downpayment. I can't imagine flying out there for a day or two with a hotel can cost you $10K.

Flying out there is like you paying for an insurance. 

While many out-of-state investors may purchase properties without an in-person visit, first-time buyers or those new to real estate are strongly advised to conduct a site visit.

if you are worried about vacancy, then multi-family is what you should go for. How much of a cashflow are you looking for? 

I am in the Lehigh Valley.

$10k and you are thinking of filing bankruptcy? I never even would've thought of that.

I think you need help with just money management. 

if you have an LLC and both properties are under it, you just need 1 operating account.

If both are under your personal, 1 bank account specifically for the rental is enough for operating.

Security Deposits should always be a separate account altogether.

Quote from @Amy Lauro:

I am a new investor looking to partner with other investors to help homeowners facing foreclosure. (fix and flips) 

Hello, 

What is it that you are actually looking for? Are you looking for someone to do the fix and flip? 

As an Accountant and CFO with two decades of experience in real estate management, I’ve observed that landlords often handle things differently. However, it is perfectly acceptable to combine all tenants’ security deposits into a single account. Some banks even offer features that allow account holders to manage individual tenant information within one account, making the process more convenient. About 15 years ago, Chase provided such a service, though I am unsure if they still offer it today. Essentially, it was one account with the bank tracking individual tenant details on your behalf.

That said, it’s critical to ensure your financial records remain accurate by reconciling the account on a monthly basis.

Quote from @Shawn M.:

@Andrew C.have you made the switch to xero? how is it going, I am with QB but need to switch. 

 Xero works fine. You should check if the bank feeds work with your bank otherwise, it's a deal breaker unless you don't mind manually doing the data entry.

@Alecia Loveless  what was the reason behind your CPA's request?