How to legally utilize one LLC income to support a second

Question

Currently I am a partner in an LLC with 1 rental property. We are looking to purchase a second property, but I am unsure about how to utilize the income from first rental to support a second. I understand commingling of funds is illegal so you cant simply transfer funds from one to another LLC for down payment, mortgage, repairs/rehab etc. Do we need to make a distribution to ourselves in order to be able to reinvest it?

Would love any helpful links, books, podcast episodes, or youtube videos to start directing me the right way. Certainly I would consult a professional prior to advancing, but I would like a rough understanding first.

Chris Seveney · Answer

@Thomas Moss

This is a cpa wurstion but your LLC is a pass through

So money made from first LLC needs to go to you as an owner withdrawal and then to the new LLC as a owner contribution

This is why it’s 1000x easier to have one LLC - don’t have to deal with this (as long as same owners in each LLC).

Reminder that you will pay taxes on profits on income

It’s not like owe I made $10k so I can use it to buy another tax free