Sign up for our FREE Monthly Email Newsletter
In addition to keeping in the financial know, you may be interested in checking your credit score and report.
¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.
²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.
³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.
4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.
Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.
Q: I am currently renovating a property in order to rent it. I am interested in opening a bank account to keep those funds separate. One bank has told me that I need a business license. Can you help me find information about opening a bank account? Using a business name vs. personal?
Andy Heller has been investing in real estate for the past twenty years and currently holds more than twenty properties in his portfolio. In addition, he and his investing partner, Scott Frank, have written a number of books (Buy Low, Rent Smart, Sell High; Buy Even Lower; 6 ½ Ways to Conserve Cash When Buying Homes ) on investing in real estate and are cofounders of RealtyJoin.com, a free social-networking and marketplace website that is open to buyers, sellers, investors, and the companies that provide the services they need to close on their real estate deals.
I asked Andy to answer your real estate investing question so you could get the benefit of his years of expertise. Here’s what he had to say:
“I do not believe all banks will require you to have a business license in advance of setting up an account. But you might need an EIN, which is an Employer Identification Number, provided by the IRS if you truly want the business to be separate.
“Here are two important steps you should take when starting your real estate investing business:
“Step #1: Speak with your accountant and discuss your real estate investment goals. You want to create an investment property plan and decide whether you’re going to have just this one investment or if you plan to purchase additional properties. If you plan to do more investing, your accountant will help you figure out what type of legal entity to establish for your real estate investments. Many investors use LLCs, and you can apply for this online in your county; the process takes minutes.
“Step #2: After you figure out what type of legal entity to open, get the paperwork done for that, and get an EIN from the IRS, then you should meet with the banks you are considering using. Ask if they have an “entrepreneur” or “premium banker” program. Most banks have a department or person that deals specifically with investors and small businesses, and it is much easier to get concise answers and guidance when dealing with the right person. Simply tell the banker which entity you selected (and if there is a delay in your state before you can use this entity), and the banker should be able to provide the proper counsel on which types of accounts you’ll need to open up. You may find the bank willing to start an account in an individual’s name and then later convert it to a business account.
“I believe your main issue is actually accurate record keeping. That’s a very important point, and it can get complicated if you wind up buying several properties. We use QuickBooks to run this business.
“Years ago, my partner, Scott, and I purchased, rehabbed, and rented a property using ‘personal funds.’ Once we realized we wanted to continue to invest, we formed an LLC, and our accountant was able to use all receipts and expenditures from before the LLC was created.
“It was just a bit more paperwork, but since then we’ve kept everything dealing with our real estate investments separate and distinct from our personal or family money.”
Contact Andy Heller at firstname.lastname@example.org.
Ilyce Glink is a best-selling author, real estate columnist, and web series host. She is the managing editor of the Equifax Finance Blog and CEO of Think Glink Media. Follow her on Twitter: @Glink
The information contained in this blog post is designed to generally educate and inform visitors to the Equifax Finance Blog. The blog posts do not give, and should not be assumed to provide, personalized tax, investment, real estate, legal, retirement, credit, personal financial, or other professional advice. Before making any financial decision, you should always consult with the appropriate professionals who can explain your options, rights, and legal responsibilities, and advise you on any tax, legal, credit, or business implications that may result from those decisions. The views and opinions expressed by the authors of blog posts are their own views and may not be the views or opinions of Equifax, Inc. and/or its affiliates.
Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.