Series LLC for management of single family rental properties

[Mike Wilson]

I am looking for input from folks that use Series LLC's for their rental properties or attorneys that have legal experience with the concept.

I attended a local REA meeting where an attorney discussed asset protection. I had an LLC created and all of my several properties were rolled in to a single LLC, so I was familiar with that but wanted a better way to segment properties in multiple entities, without putting each in an expensive individual LLC. I was introduced to the concept of using a 'Series LLC'. It sounded like a great way to cost effectively segment my properties into individual entities. I followed the attorney's steps to have my rentals set up in a separate 'series' as how a series LLC is designed. Each 'Series' is managed by another management LLC. I am told lots of folks with multiple single family rental properties in Oklahoma do this - I just don't know any of them.

My concern is how the banking is handled. while I have opened up checking accounts for each of the 'series', I use a single management account to collect rents, pay expenses. I never distribute money to the single back accounts set up for the 'series' properties, it was my understanding I did not need to. However, with the issue of intermingling of funds is always in the back of my mind and I am concerned that I am not using or understanding how to properly use these accounts. Should I have retained earnings from each property moved to these accounts at the end of the year? That would be a real pain and create some issues with depleting my management reserves. Not sure of the proper way to manage this.

Long story short, can anyone that utilizes series LLC's for there properties tell me how they manage the checking account issue. What are other's attorney's telling them?

Thanks,

Mike