Why, I have been doing a lot of posting the last day or so, just forestalling jumping into bookkeeping and taxes.

Financials are critical and many Mom & Pops are not the best bookkeepers.  

Plus, it will be hard to differentiate between active income and expenses and passive income and expense, probably a nightmare from a bookkeeping, accounting and taxes perspective.If you do your own property management, then you want a separate LLC for that - same idea, separate active from passive participation.

This general strategy, however, keeps some of the easy parts (for instance, streamlined structure and ease of financing/bookkeeping) while giving you meaningful protection.Hope that clarifies for you and the others watching this thread!

On one deal we pay a seperate bookkeeper to do the books.

I am guessing most or nearly all accountants and bookkeepers are familiar with it.

Meanwhile I have been assigned the task of bookkeeper and I would greatly appreciate any suggestions any of you might pass along.I signed up for a 30-day trial of the web-based accounting package Xero, which I know has far greater capability than I need.

Payroll, bookkeeping, etc can mostly be done remotely.Here is a great list of questions to ask a potential accountant:http://www.biggerpockets.com/forums/51/topics/70447-questions-to-ask-a-cpaAlso check out the www.NAEA.org page in your search.

If you are using quickbooks or any bookkeeping software, input it as a journal entry.

As much as possible, I'd like to handle the bookkeeping on this as correctly as possible.My initial research tells me that I'll need:- A dedicated checking account for this property.- A savings account to hold the deposit for the house.- A savings account to hold the deposit for the grandma unit.I currently use Capital One 360 for my consulting business and like how easy it is to create sub-accounts at no cost.