Creating a Property Mgmt LLC to handle expense for 6 rental LLCs

[Thang Nguyen]

Hi BP community,

I currently own rentals in my own name and they are commingled with my personal finance and being protected with a $1M umbrella policy (not smart so please don't judge). I would love your advice on the best way to set up a LLC to protect my 6 SFH rentals while keeping accounting and management simplified. I can set up 6 LLCs or one series LLC to protect them, but the downside is having separate bank accounts and credit cards. I don't want to carry 6 additional credit cards and always remember to use the right one. With separate bank accounts, I have to keep extra money in each account to pay the mortgage in case the tenants are late with rent or there is a vacancy.

Here is my proposed solution (don't laugh). Renters will deposit the rent into their respective bank account for each of their "rental LLC" to keep each LLC separated. I will create a 7th LLC for a property management company that will pay all the mortgages and maintenance under it's own bank account and credit card. This PM LLC will invoice the rental LLC for mortgage and other maintenance expenses that was paid. The rental LLC will pay these invoices and hopefully be left with a positive cash low in the rental LLC. If there is a negative cash flow then the PM LCC would record the loss. I can save all the receipts and put them into an envelop for that house in order to keep them separate. The most important thing is this allows me to pay all the bills for 6 rentals from one bank account that has enough reserves!

Crazy or crazy like a fox????  Let me know your thought on this or how you have manage to solve this problem.   Thanks in advance.

Thang