Banking and Cash Management Strategies
I've. Even trying to figure out what banking and cash management strategies works best for landlords. Newbie here and working on finding my first multi family deal. Got tons of +questions, please bare with me.
Do each child LLC needs their own bank account or just the parent LLC? And if you create an operating LLC, does that need it's own bank account?
How is cash distributed and collected if you have multiple properties? Do rent from prop a b and c all go into one bank account? Or is there a separate account for A B and C to hold reserves and then net profit goes to the parent LLC which has it's own account? Do the reserve gets held in the operating LLC bank account and net profit goes to the parent LLC? Or into each child LLC? Do each child LLC hold its own reserve of cash or do all the properties share the reserve of cash?
I'm creating this business with 2 partners. Do we collect and split profit from the bank account into our own personal account on a monthly basis or just one big transfer at the end of the year?
I'm sure the answer will probably be "it depends" but I want to know what strategy has worked well from your experience.