All Forum Posts by: Billie Jo

Complicated! We are set up kind-of similarly and we also use Buildium. I set up an account in the Manager LLC name and use it for our "Taxes/Insurance" escrow account (we send money here monthly and transfer to the general account when taxes are due so that all expenses come from the main Manager Account) If it collects interest, I would give this to the manager LLC, however I dont have mine in a savings account. I would send this insurance escrow amount to the account before distribution to the owner since the manager is already paying all the expenses.

We have Holding LLC's as property owners that each have a bank account. The LLC owners are actually just my husband and myself, so it's all pass-through taxation.

I came here to find similar information to your question, so I don't have an exact answer for you! We just formed a partnership LLC that will be managed with our existing (husband and wife) LLC's, this is why set up is important! We are in PA.

I would not co-mingle money after taking from the Manager LLC account, but that is just my opinion. Good luck!

@Tatyana M. Interesting! So is that how you did it? 

After I posted this, this is what my CPA suggested and how we filed our 2020 taxes:

We, my husband and I, have a Management LLC that receives a 1099 from us individually. We then claim our self-pay health insurance costs as an expense (this totals a lot when you are a self-payer!) and we claim our business miles and some other expenses against this Management LLC, so the taxable income (which is taxed at the 15.3%) is nominal. Then you get a deduction/credit for 1/2 of these self employment taxes. While we are paying some into social security and Medicare, this allows us to get credit for a deduction which we would not otherwise get. Since I already had the MGMT LLC set up, this works for us. We do not employ or pay health insurance for anyone other than ourselves.

I am curious about the S-Corp and if that worked out for your situation.

And I also agree that as long as you have some ownership in the LLC that owns the property, you do not need a real estate license or have to use a broker to manage the rentals. Thanks for sharing!

I use this type of form when applying to a lender to give them a snapshot of what our portfolio and experience is like... this is only a sample, not an actual form or properties.  I think this could be viewed as a multi-family resume of sorts? I am a firm believer that presenting yourself with a neat and organized plan is very important to any potential lender.

Some of these threads are dated, but I still look at them when I am researching a topic!

@Tatyana M. I am currently reorganizing our portfolio and we have it set up with one management LLC and the individual properties held in a couple separate HOLDING LLC's.... I am curious what you found out! I have been searching through some old posts but it seems PA is a little different than other states. I am thinking now that it was unnecessary to create 3 LLC's but whats done is done!

Particularly, I am trying to determine if the HOLDING LLC's should be receiving some income from the management LLC's. As we put this together, I was thinking the HOLDING LLC's would not have any cash flow or income and would just Hold the properties while the Management LLC would write the leases, collect the rents, pay all the expenses... etc.

As out number of properties grows, we want to look and act like a business, at the same time, I don't want to go overboard!

@Carlos C. Just curious how you ended up with this? Care to share what you learned?

Check your state's unemployment website, PA is allowing filing now

https://www.uc.pa.gov/Pages/co...

Another thought is to ask if he has used your rental as his mailing address.... if so,it makes it pretty cut and dry.  If he does, he has be approved to be put on on the lease. Make your life easier and not so complicated!

We have a Northwest Savings Bank, but I think they are mostly PA.... I think you have to be a member, but maybe just open a free account and put $100 in it if you need to have an account at your local bank?

6:30.... I think you'll have to join, aptssoc.com