I currently own 2 SFH's in my own name and all funds flow through my own personal checking account.
Moving forward, I plan to put all new properties into their own LLC (single member) with their own business checking account.
My question is this - If I open these new business checking accounts at the same bank as my personal account, can I make direct transfers from the business checking account into my personal account and vice versa? Or is this a big no no in terms of commingling funds?
If so, what is the recommended process for withdrawing excess profits from business checking accounts and putting them into my personal account for using towards future purchases?
Co-mingling funds usually means you use one bank account for both your business and personal use.
If you have an LLC account and a personal use account, it would only be co-mingling if you used your LLC account for personal expenses and your personal account for business expenses and kept no record of what is where. Keep them separate and track any transfers and you are fine.
To withdraw excess funds, simply make a transfer from your LLC to you. Then, be sure to note in your accounting software the transfer. Depending on how you set it up, it is either a return of capital, repayment of a loan, or a distribution of profits.
Before getting there, though, I would encourage you to look more deeply at your options. If you are married, a multi-member LLC may provide better asset protection and estate planning. It also may not be worth the time and hassle to create multiple LLCs. Personally, I don't use LLCs for single family and instead beefed up my protection with insurance. Talk to your advisers.
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