Multiple rentals in LLC multiple bank accounts, opinion?

Question

Hi Guys,

Having several properties divided into several LLCs.. these LLCs are owned by a Parent LLC, which is owned by a partnership.

LLLP -> Holding LLC-> Rental LLC1/ LLC2 / LLC3

All income/expenses are flowing out/in from a single bank account.im using QB to account and allocate by classes, so no mess there.

i heard there is a need to have a bank account separate for each LLC, it seems excessive and cumbersome to me.

is there a better way to go about this and maintain a balance between protection and ease of operating?

i was considering setting up a property management LLC, owned by the holding LLC to manage all the rental LLCs, collect rents etc and having them flow back to the main account.

what are you thoughts? do you have suggestions on better ways to set it up?

John Underwood · Answer

My attorney assures me that this structure is sound.

The lower level LLC owns the property. The LLC that handles all money is setup for that purpose.

I would consult some other attorneys and get their opinion.

My goal is to not be sued by taking care of my properties and tenants.

Attorneys like going after low hanging fruit. I have Asset protection set up to make it difficult so that they would rather go after easier work.

These type Suites are usually contingency based meaning the attorney gets no money if they don't win the case. So I have made it difficult and time consuming so that they will won't want to waste the extensive time it would take to try and win a suit against me.

Jonathan B. · Answer

What was their response regarding having all the inflow going to the same bank account?

one argument i heard against that was that if you basically have all the transaction done via 1 bank account, you essentially cant argue these are separate businesses in case of a suit

John Underwood · Answer

I have a similar setup to you. I have one LLC with an EIN number that receives all income and pays all the Bill's.

I got my attorney and CPA together on a conference call to mutually agree that this was the best way legally and from a tax perspective.