Start up - management question.

[Zach Crabtree]

I would like to start by saying I am very new to this. I have 30 newly acquired LTR houses set up in a few LLCs and am being told by one mentor to create a umbrella company/management LLC. To have the management LLC collect rents and hanle all maintenance and expenses. The management LLC would then just pay out what is left to the holding LLCs. In your experience would it be better to set up a management LLC or just keep them separate.

[Drew Sygit]

Quote from @Zach Crabtree:

I would like to start by saying I am very new to this. I have 30 newly acquired LTR houses set up in a few LLCs and am being told by one mentor to create a umbrella company/management LLC. To have the management LLC collect rents and hanle all maintenance and expenses. The management LLC would then just pay out what is left to the holding LLCs. In your experience would it be better to set up a management LLC or just keep them separate.

it's called a Management LLC.

Each Property LLC needs a signed management contract hiring the Management LLC.

Then the Management LLC can legally collect rents and pay expenses on behalf of the Property LLC's.

This will avoid having each Property LLC to have its own bank account.

NOTE: check this out with attorney and tax professional!

Also, there can be an issue depositing a check that is in the name of a Property LLC into the Management LLC bank account.
- We get around this by depositing via phone app or at an ATM as not all deposits are audited.