How do you pay yourself, when investing in real estate?

[Davey Davanoski]

I am  very interest   and eager to start in real investing. I just started to read some books, because i  like to read, and maybe i will learn something valuable.  I have seen many articles, saying to start in one thing and become good at it. 

If i ask myself what i am interest in, is multi family ranters.I could have passive income from more people, than going to single family homes. Might be harder, but that is what i am interest in. For now, i am just reading books and watching people thoughts on investing in real estate, pros and cons and different markets. 

But, i am not really sure, how someone gets paid monthly or somehow when investing, let's say in multi-family buildings. That X person have Xs units around the country or a city, so how that someone earn money? Do i need to have LLC business entity, and pay myself employee salary? Or, as a owner how much someone pay himself/herself?

[Christopher Phillips]

@Davey Davanoski

You can have all the rental payments go to your personal savings or checking accounts, or for the purposes of easy bookeeping, you can also setup a checking account for the LLC and have everything go in there.

Then sweep out owner funds each money to your personal account when needed.

But, that is just for bookeeping purposes. When you go to pay income taxes each year, they don't care about those things. The IRS is just concerned with passive rental income, which is offset by related expenses.

The property may or may not be in an LLC. If you get a conventional loan, they won't let you put it in an LLC. But, you can setup an LLC just to manage collecting rental checks and dealing with expenses. But, since this is all passive income, it will flow through to you anyway for tax purposes.