Strategies for paying yourself from a Series LLC
Hi BP,
I am finishing up my second deal and my first deal as a serious investor. I purchased the house in cash and paid for the renovations out of pocket. At the direction of my CPA and attorney, I then created a single member Series LLC including one Master (umbrella) LLC holding a checking account but no other assets, and one sub-LLC owning the house and two bank accounts - 1) an Operating account in which the rent is collected and maintenance/property management fees are paid and 2) a Tax account that collects a monthly deposit from the Operating account to hold and pay for all taxes.
I plan to purchase other properties and create a new sub-series LLC under the Master LLC for each property.
My question is: how do I pay myself the net income from the rents into my personal account? Am I able to set up a recurring monthly transfer from the sub-LLC Operating account to my personal bank account as a type of salary? Should I pass the income from the sub-LLC into the Master LLC before paying it to myself (this may make sense once I have several LLC's all collecting rent so that my personal income would all come from one source)? If I have unspent money in the operating account quarterly/annually, can I pay that to myself as a bonus?
If anyone has experience paying yourself income from a single member LLC (ideally a Series LLC), I would be eager to hear your experience with best practices and things to avoid.
I am in the DFW area in Texas and I understand Series LLCs are not legal in every state and laws may differ, I am just interested in hearing how people pay themselves from their LLC. Thank you in advance!
Best,
Max