Comingling Funds of Managed Property

[Patrick Nolan]

I have some rentals of my own and each is in an LLC with its own bank account. I'm about to begin being prop mgmt of a SFH for an investor with a separate company I have established.

How do people handle funds? Do I pay the mortgage for the property owner? How about setting funds aside for vacancy, maintenance and capital expenditures? Do I hold those monies?

Is the lease between my mgmt company and the tenant? Property owner is going to put the property into an LLC but has not yet done so.

[Nathan Gesner]

Quote from @Patrick Nolan:

You cannot comingle any of your funds with the funds of those you manage for, even if your funds are held under an LLC. I have 33 units and manage 350 for others. Even though my rentals are held in an LLC and I have property management agreements between my PM company and the LLC, I still have to keep the LLC funds separate from all the other owners.