Indy Anna explains;

Which banks are best for real estate investors and landlords

The six pieces of criteria you need to use to pick the best bank for your investing

The little secret to finding a bank for all your real estate investing needs, this is a REAL gem and this can be a real lifesaver

You can download the above Guide in .pdf from HERE.

“Which banks are best for real estate investors and landlords or does it even matter?” This question came up as I was answer the other one about “Should I have a separate bank account for my rental properties?” I answered that question so be sure to check that out too. Ideally, investors are going to be set up with the right kind of account for their needs, either personal or a business account. Opening these accounts at the right bank will make everything easier.

To be clear, all banks are not created equal. I say this as many of us simply think of going to where we currently bank for any and all future needs because it just seems easier. But after speaking with some of our lenders, I was able to come up with better advice in choosing the best bank for real estate investing accounts. Here’s what they suggested;

The criteria a real estate investor should use in picking their bank:

Banking issues;

Now, we could delve deep into falling bank ratings and how this comes from fake account scandals, falling stock prices, and poor ratios of liquidity & capital vs potential use, but for this class we really just want to make it easy and give you the best options available with one little surprise in the end. So the actual banking issue may not impact you that much but if nothing else it is good to know you are putting money somewhere that rips off their clients a little bit less.

Ease of account use;

So, as investors, ideally your bank account will be one of the easiest tools to use, and not add to your workload, but help take away from it.

Here’s what a real estate investor and/or landlord needs from their bank:

– ACH deposits

– No maximum or low limit maximum of checks written monthly

– Good APR yields

– Debit card provided, a chipped and national debit card, not bank issued alone

– Easy deposits without mandatory debit card present

– Monthly ingoing vs. outgoing recap overviews

Let me break these down quickly for you guys.

ACH will allow your tenants to make direct deposits into your REI account monthly – no checks needed and ‘lost in the mail’ excuses.

No maximum amount of checks written OR low limit number of checks written each month- this pertains to business accounts for S/C Corps with shareholders for dividend distribution, LLC’s with multiple members, investors paying contractors who aren’t set up for plastic payments – never pay cash so you have a paper trail at tax time.

Good APR yields- some states require security deposits to be held in interest bearing accounts, might as well make sure there is room for funds to grow as much as possible during this time. This can also help some with an additional amount of cash each year for the account holder, even if it’s not a huge amount.

Debit card provided- Most every bank can issue a debit card without any hassle. There are some banks however that offer chipped debit cards, by National providers. This is helpful for online payments, such as semi annual property tax payments. Having a bank debit card alone may not work for all online transactions. For example, BMO Harris offers a chipped debit card through Master Card, which can be used for all online transactions. You may also need an international card as well.

Easy deposits without mandatory presence of debit card- again, this is for ease of use.

This can be situational but here are two examples of how this recently mattered in real life that we were called in to help with:

One investor had older tenants in a multi-family property and was having some difficulty with checks coming in late due to a US Mail delivery issue during COVID. Her tenants could not understand the concept of ACH and this wasn’t an option for her. Her current bank required her to have her debit card present for all deposits, and this led us to finding an easy solution for her.

We had her set up another account at a bank that didn’t require a debit card to be present for deposits. This bank was located near the pharmacy where tenants would be at often, and would be able to make in person deposits into this account. This took less than 5 min for them to do. You want to make sure you pick a bank where anybody can deposit funds into any account, usually all they should need is the account holder name and being at the correct bank. Withdrawals are different obviously, but anybody should be able to put money in your bank account lol.

-The other situation we were asked about was a pair of investors who had set up an LLC, one living in the state of the rental while another was out of state from the rental property. This was as a self managed property and an online payment portal through the property management was being used. So the normal servicing did not apply. The out of state investor needed to make a large deposit into the joint account quickly for a major repair bill, and a transfer option like Zelle wasn’t in use with the bank.

In this case the solution I came up with for them was to have them both set up a payment app with Venmo and then have this immediate transaction complete quickly. The long term fix was to move the funds/account of the LLC to a bank where deposits did not require the debit card to be present for deposits.

Monthly ingoing vs outgoing overviews- this is most helpful for a quick glance as to what’s going on with your investment and determining cash flow, positive or negative. At tax time, having a quick reference to use with Turbotax or Intuit will streamline things for your CPA and make sure that all expenses are accounted for in deductions.

Now that we have our criteria for the best banks for real estate investors, let’s look at the actual BANKS:

First, here are a few that we do NOT recommend:

Barclays: On top of excessive fees we’ve had many investors who were wrongfully charged and the correction took months and in a few cases accounts were closed immediately with little to no warning.

PNC: On top of a high transaction fee and overall fee structure we’ve had many complaints about charges with them as well.

BMO: They have a very low monthly check limit and no easy ACH set up.

Now here are three banks that we DO recommend for real estate investors and landlords:

U.S. Bank – less than 150 transactions per month will have zero fees or monthly maintenance fees

Capital One- offers up to to two checking accounts per business – LLC- and provides up to five credit cards with unlimited transactions

Chase- offers Chase QuickPay for transfers, and a minimum monthly balance requirement fee of $15 if $2K isn’t present. With $2K+ daily balance maintained, there are no monthly fees. Chase has some of the most lucrative rewards programs for credit/debit card use.

So based on our criteria those three should work for you.

What about that secret solution I promised you?

The secret banking solution for real estate investors: shop LOCAL.

Odds are that you might find the best bank provider is a smaller bank in your hometown, a little guy that is simply overlooked. The reason for this is you can usually speak with the branch manager or underwriter in person, they may offer better rates, debit and credit card services, and overall ease of use to simply compete with the ‘big dogs’ of banking.

This won’t work for everyone in all locations, but you may find a local, small bank fits your needs best of all. The desire to compete in the banking world may offer perks and ease of use that bigger banks are simply too big to provide. I always start local in the areas we invest in because if nothing else I start a relationship with a local bank and get good insider info. You can often get a special, customized deal if you work with a local bank that is much better than anything on the “big” market.

For more help in finding FDIC insured banks near you, big or little, here’s an FDIC registry that will help. I’ll include this link in the description below as well;

https://banks.data.fdic.gov/bankfind-suite/bankfind

So, in summary:

I’ve covered which banks are best for real estate investors

The criteria you can use to pick the best banks for investing and landlording, with a few real world examples

I’ve gone over one little secret to finding a bank for your REI needs (shop LOCAL)

Also if you need help setting this up you can check out a list of contacts that we use at our “People Page” just go to: BigReia.com/People

Also go to the link below and you can get this PRINTABLE download that goes over the six criteria to choose your bank so you can get that freebie and also the adventures of our BigReia friends to stay tuned for. Check the link below for the download = )

Also make sure study our stuff here at BigReia.com:

We are providing the world’s clearest instructions on how anybody on the planet can create a passive income of at least $30,000 a month through real estate and business building.

Make the Universe Smile.

Thanks so much! = )

Indy Anna