All Forum Posts by: June F.

I create hundreds of series LLC for clients all over the country and use them for my own investing. Here are some simple answers:

1. You can use one bank account for all series. Your bookkeeping should be kept separate, however. Think of it as an escrow account for multiple clients. It's the bookkeeping that's more important than how many bank accounts.

2.Your agreement between the series LLC and the property management LLC should be arm's length and reasonable market terms. That is, put it in writing and have the PM company charge some fee for management. Run them like true separate entities.

3. You take distributions out of any LLC by simply transferring money out of the account. Remember that only the members get distributions and must take them according to percentage interest. You may pay yourself a salary on the PM LLC. Go over this question with your accountant to maximize tax savings--as that depends on a number of things.

You should really have a good attorney and good CPA on your team. The series LLC is a great tool. But does come with some particulars, like titling, contracting and bookkeeping. Those have to be done correctly or you'll lose the separation of liability that the series provides. But once you get it down, it's easy. I often find that most investors that create series LLC because they've been sold on it, don't use it correctly. I provide education to my clients so they know what they're doing.

Jeff

Be careful as some states required your to be licensed to manage properties held by another entity or to run a property management company. You may want to consider setting up an account for each property for the tenants to pay into. If you have A TON of property that can be a lot to manage so you may use an operating account that collects. Pay everything from t here into the master account and then take your distributions from there. Are these held personally or with a partner/spouse? TX is a community property state so if you live there you will not default to a partnership with your spouse; however, it may be something to consider in order to mitigate 1. an Audit and 2. more separation from the LLC.