Financial Organization - LLC or not?

[Rob Cucugliello]

Hi all!

Hoping for a little guidance here. I am small time but growing. I currently own 2 SFH rentals but will soon have 5 rental units within 4 properties, plus a 5th property that I'll be flipping (to build additional capital). I do not have an LLC, but I do have umbrella insurance (which will need to be updated).

With the upcoming growth, I quickly noticed I need to be more organized, specifically financially. Everything is going in and out of my personal banking accounts with a 'separate' savings account to hold rent, ect in - but this necessitates a lot of account to account transfers. I also have to track any expenses separately, and make sure it eventually hits the 'Real Estate' labeled account appropriately. This also made tax season a lot harder than it had to be. My gut reactions is to create an LLC, and then a small business bank account associated to that LLC, but I'm not the LLC is actually required. So my questions are:

  - Should I just create a small business bank account? or just a separate personal bank account? or does it not matter? other options?

- Does creating an LLC help with any of this? or just satisfy the need of an EIN which is needed to create an business bank account?

- Will an LLC help with organizing taxes? or will just a separate bank account take care of that.

  - I am considering adopting Buildium to manage the rentals (applications/background checks/leases mgmt), which again I believe requires business bank accounts. Is this true?

Overall I'm trying to understand if my gut reaction of creating an LLC is right, or if its really just the need to separate my finances - and if the latter, is an LLC just a prerequisite? Any additional guidance on the overall financial organization is much appreciated!

Hope that all made sense!