Owners distribution...how much?

[Tab Teehee]

Hello all, as we near 100% occupancy (YAY!), we are hoping to see some regular income from the fruits of our labor!

Currently the management company is collecting rents, building an emergency expense fund, paying themselves, paying the loan payment, water/trash, etc., and whatever is left just sitting there! I finally had to say, hey...i've got bills to pay too, can I have some money!

Seriously, what type of arrangement is most common for owners distributions? Is there a preferred way for tax savings? They've proposed a flat monthly amount of what's available and a lump some of what's remaining at years end.

I've only self managed so I'm in unfamiliar territory here.

[Calvin Ozanick]

This seems extremely odd. What we do as a management company is as follows. We pay all bills, taxes insurance and anything else the owner would like us to pay out of the rent we collect at the beginning of the month. Throughout the month expenses may come up, which we will also pay out of the rent. On the last business day of the month, we collect a management fee for the agreed upon % of the collected income. Then, we pay out what is left for the month. Allowing your manager to hold all of your money is dangerous and slightly odd. This way, you can reconcile your books each month and track overall performance.