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Updated almost 2 years ago on . Most recent reply

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Mary Jay
  • Glendale, AZ
226
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What account do you use to pay your mortgages on your rentals to avoid comingling ?

Mary Jay
  • Glendale, AZ
Posted

Hi guys,

Ive been trying to figure out how to pay mortgages on my rentals to make sure there is no co-mingling of 2 different LLC's funds or my personal funds with those LLC funds.

So lets say you have a house that is in an LLC, and the tenant paid the rent into the LLC's bank account. Do you send the mortgage payment and pay all of this LLC's expenses from that account?

Most Popular Reply

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Richard Elvin
  • Investor
  • Cleveland, TN
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Richard Elvin
  • Investor
  • Cleveland, TN
Replied

@Mary Jay I think that this is pretty straightforward. The Property Management LLC (PM) collects the rent for the Rental LLC's (R-1, R-2, and R-3). PM takes it's cut, whatever that is (for our example it's 20%) then sends the remainder to the rental LLC's.

Example: PM-LLC collects rent from the tenants of: R-1 $825, R-2 $1000, and R-3, $1250. So PM has $3,075 in rents collected. 
PM-LLC then pays out the rent to the rental LLCs, minus the PM fee of 20%.
So R-LLC-1 gets $660, R-LLC-2 gest $800, and R-LLC-3 gets $1,000. 
Each of the LLC's then pays their own expenses from their individual bank accounts, mortgage, repairs, office expense for the PM-LLC, etc.
Nothing is comingled, the PM-LLC collects, then pays out the rents, keeping it's pm fee.
The rental LLC's get the rent's from the PM-LLC, then pays for expenses individually.

This is just the opinion of some guy on the internet. I hope it was useful!

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