How Many Bank Accounts Should You Set Up For Your LLC?
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- เผยแพร่เมื่อ 27 มี.ค. 2022
- How many bank accounts do you need for your LLC? In today's video we chat all about bank accounts and how many you need for your real estate LLC!
When Do You Take Distributions From Your Real Estate LLC?
• When Do You Take Distr...
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ABOUT CLINT COONS
Clint Coons, Esq. is one of the founding partners of Anderson Law Group, Clint has grown his legal and tax firm to over 400 employees by assisting real estate investors with creating and implementing solid entity structuring plans. His success in these regards is in large part due to his personal investing experience. A successful attorney, real estate investor, and speaker, Clint has used his innovative and dynamic strategies coupled with knowledge borne from experience to help thousands of people save millions of dollars and build real wealth.
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The information provided in this video should not be construed or relied on as legal advice for any specific fact or circumstance. Its content was prepared by Anderson Business Advisors with its main office at 3225 McLeod Drive Suite 100 Las Vegas, Nevada 89121. This video is designed for entertainment and information purposes only. Viewing this video does not create an attorney-client relationship with Anderson Business Advisors or any of its lawyers. You should not act or rely on any of the information contained herein without seeking professional legal advice.
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Learn about Real Estate & Asset Protection from Clint Coons, Esq. and Toby Mathis, Esq. at our next all-day free Livestream 9 am to 4 pm PT. on Saturdays. Our attorneys and specialists will answer ALL questions: 👉 Save Your Seat: aba.link/w7k
Clint, you're a mind reader!!! I was was just researching this topic yesterday and today and haven't found good info like this. THANK YOU!
Perfect!
Same! Literally just now, and pulled up TH-cam and it’s right here.
Fantastic, Clint is the best attorney for LLC in the USA.
Too kind
This man is Gold.. thanks
Thanks yet again Clint, much appreciated.
Very welcome
Great video🎉
Love the content! I cant wait for my strategy session!
Boom!
Clint your videos are incredible. Thank so much for providing this knowledge.
Glad you like them!
I would like to see a video on pass through entity (PTE) tax with nested LLCs.
Thanks for the knowledge I have 3 and trying to grow more using your tactics!
Fantastic!
Wow, your the man bro. Thanks
Glad to help
Property Management it is....moving right along....
Thank you
Thanks for the info.
You bet!
Great information. When you setup the LLC for Real Estate Investing, what NAICS code do you choose since Real Estate in considered high risk?
hey Clint, love your videos. Instead of a Wyoming LLC, would you recommend a Nevada LLC to be the main LLC that covers the rest of the property LLCs that are within other states? Or is a Wyoming LLC just superior in every way?
great info
Thanks for watching!
Very good info I needed this I own 4 businesses trucking airbnb turo. Trailer rentals. I had no clue how to approach this thanks 🙏
CJay Bassi
Thanks for watching.
Cjay let’s link up bro I own all these business too
Thank you for everything you do for us. I'm starting a Wholesale and a Buy/Hold business. In my attempt to maximize asset protection and anonymity and also minimize the number of tax returns and tax liability required for all these entities, I'm curious if the following entity structure works in your book.
1. Form a WY C-corp - this entity will Hold and Manage other active and passive business entities. This entity will pay my salary, run payroll, P&L, all income and expenses from all other entities will flow up to this entity for tax purposes. This WY C-corp will be held by my Living Trust.
2. Form a WY LLC/S-corp to operate my Wholesaling business (Active income). This entity will be held and managed by the WY C-corp. Taxes for this entity will flow-through up to the WY C-corp.
3. Form WY LLC/Disregarded. This entity will Hold and Manage all rental property LLCs (Passive income). This entity will be held and managed by the WY C-corp. Taxes for this entity will flow-through up to the WY C-corp.
Will this structure work for a Wholesaling AND Buy/Hold investing businesses?
Hi @ClintCoons
Is there an issue with using the 3rd example (One bank account in the holding company) and also having the holding company be the property management company?
Assuming records/income/expenses for each property LLC are well accounted for separately.
You would want to keep these separate. If you manage with the holding company then you run the risk if the management entity is sued then your LLCs could be at risk.
Thanks for the video Clint, it answers a lot of my existing questions. Additional question with the "best" scenario to have seperate bank account for each LLC, is it ok to just have a seperate SUBACCOUNT for each LLC holding properties (other than the Wyoming LLC)? With Chase, you can add as many sub account in the same bank account as you need, each one with a different account number. Or do you still want to have a seperate MAIN account for each LLC? Thanks!
Yes, man investor use the sub account with the holding or management LLC tracking all expenses. In certain situations the PM will only issue one wire (despite multiple entities) and you have no other option but to use one account.
Hey Clint, Hopefully you can help with this question. If we had our business banking structure set up the second way you mentioned, with the property manager llc. Then, if we wanted to build business credit. How could we build business credit for the parent WY corp? Seems like I would have to open a credit card in the property manager name to pay for all expenses, then the parent Corp would not get any credit for it? Thanks!
Yes it would be best to build it with the management entity and not the holding.
Clint, what if a person, entity or authority subpoenas the organizer (e.g. Anderson Business Advisors), do you then have to disclose the member's information? Or will the member be protected under ACP? Because how can one be truly anonymous if he/she can be subpoenad?
Yes we must respond to a subpoena but on what grounds would one be issued?
Great video, Clint! What if person has a holding company + individual llc to hold real estate. AND a bank acc where income from a w2 goes into. Would it make sense to place a w2 bank acc into a parent company as well?
Your w-2 income is paid to you and not to an entity. If you want to move your money into an LLC then you would make a deposit (contribution) into the LLC.
If I have a Series LLC holding property, with 15 different series, one property per series,and a property management (PM) LLC. And a WY LLC underneath, as in your diagram. In this case, the records of income and expense would be kept by the PM LLC. I have a way set up in Quickbooks to account for the individual Series income and expenses using a different class for each owner Series. Would the PM LLC be a separate LLC from the Series LLC, or would it be set up as another Series within the Series LLC?
Yes it would
What about the active business LLC's like Wholesale company or a fix and flip in various states? What would like look like?
Your active business will definitely need a bank account.
Hi Clint, i don't know if this was implied but for each investment property LLC; does the checking account get opened and moved into that same LLC so that each real estate LLC has 1 property and 1 checking account?
Second question; did you have a video on how to protect personal stock accounts via an LLC?
Thanks!
Here is a link to my video on protecting your stock account - th-cam.com/video/_8hYh_xaC7A/w-d-xo.html
Regarding the bank accounts, if your investments are located in TX, I suggest you use a series LLC and hold each property in a separate series. With a series structure, you will have a bank account for the parent but not each series.
This is great. If you setup separate management company, does it need to charge fees to the RE company(ies)?
No. Typically I would use a disregarded LLC to act as the management arm.
Imagine I have 5 properties that r each in the own business. I have a property management business that actually signs the leases and makes the profit off the 5 properties by renting them out. Isn’t that income the property management businesses? Why would I have to make sure that I can split up where the income came from if it all goes to one business.
Furthermore, does each of the businesses have to pay their own mortgages separately in their own bank accounts? Or can the property managed business pay all of them?
I am in the process of setting up a Series LLC for my rentals in Illinois. It will have 7 Child Series but no management LLC. What is the best practice for it? Should I have a separate bank account for each Child Series and the Parent, so 8 bank accounts? If I want to take out a distribution, can I transfer the money from the Child Series directly to my personal account? Or do I have to transfer it to the Parent bank account then to my personal bank account? How about if I want to add more money to a Child Series? Can I transfer directly from my personal bank account to the Child Series? Or do I have to go through the Parent bank account. Also, how would this work for credit cards?
Each LLC could have a separate bank account. When you move money from the child LLC it will run through the parent LLC then out to you. You could obtain a CC for the parent LLC and just account for the expenditures per property.
@@ClintCoons whats the purpose moving the money in the child bank account go into the parent bank account to take the distribution? Why not just straight out of the child bank account?
Hi Clint!
For each subsidiary I create, do i also need a business address? Or am I able to use the same address of the holding company.
Thanks!
You can use the same.
Would having the management LLC that receives all the rent payments would that be considered as commingling between the property LLC and management LLC?
No unless you never remitted the rent back to the LLC that owns the property. If you try and bypass sending the funds back because you own the mgmt entity and the rental LLCs this will be an issue. You should not take the rental income directly out of the mgmt entity.
Clint, is it acceptable for the tenant to pay via Venmo (or cash app) to a personal Venmo account with the funds being transferred from Venmo directly to the Property Mgt. Company for the LLC Rent?
It works but I would set up an account for the corporation. If the rents are coming to you personally it is easy to make the claim you are the PM.
Hi Clint, I have a question regarding a Series LLC structure: I created the Parent Series LLC and have a single family home in a Child Series LLC. In terms of creating a Property Management LLC, can I create this as a Child Property Management LLC under the Parent Series LLC that would send the rent collected, etc., to the Parent Series LLC? Let me know your thoughts/if I need to clarify. Thank you in advance!
Typically I would tell investors to have the rents sent to the parent LLC in a situation like yours, although you could use a separate child but you will need to open up a bank account for the child LLC.
Can one PM LLC collect the rent from rental houses located in different states? If so, do we need set up the PM in WY (the same state as the holding company)
Yes but if you are the PM then you will need to foreign file the company in every state where you are collecting rents.
@@ClintCoons Many Thanks!
@@ClintCoons how would that look when paying taxes?if u got rents from diff props/llcs goin to one pm llc in ur home state of ny for example?
I got a question. I am about to sign a contract with the developer. I would like that the LLC appears on the contract instead of myself. Do I have to report the contract on the tax form for the IRS? Thanks
The contract is not reported to the IRS
Next Video idea - How to form an anonymous LLC as a non-citizen in USA if Anonymity and full control are the biggest priority for the owner.
Means a scenario where Owner's name would never be revealed.
I have a video on forming an anonymous LLC. It applies to anyone.
How are able to set up multiple entities, according to beneficial strategy, in various states for clients if you do not offer legal advice in all of those states?
Entities is one thing, handling local legal matters is another. We do not take the place of a local attorney even though we have attorneys licensed in many states we do not offer services outside of entity formation.
@@ClintCoons Of course, but doesn't my question apply to the need for correct structure and set up in order to correctly utilize entity formation strategy?
@@davedriscoll6324 Absolutely and we can handle this for you but if you need to evict a tenant or draft a lease agreement, you will need local counsel with experience in these matters.
Hi Clint, very good video. I have the WY LLC, and have one in the state i am doing business (MA), what i need to do or how do i put my MA LLC under the WY LLC, to do it as you explain, that the WY LLC is the Member/Manager instead of me? Thanks
You need to assign your membership interest to your WY LLC.
@@ClintCoons How is that done? Via Secretary of State? How much does your firm charge for that process ?
Are there tax implications in doing this if the operating LLC is single member? And in the case of a creditor-friendly state like GA, are you better off assigning PART of your membership to your WY LLC to create a DEMMLLC and enhanced charging order protections?
@@ClintCoons
Instead of the Mgmt company taking an expense out of the rent, can they bank the full amount of the rent to my account, and I pay the bill to the Mgmt company from the particular series rental property ???? Help 😮
Yes you can.
I heard to make a real estate business checking account LLC costs $200 a year to service and required to leave $1000 to not get fees is that true?
Maybe with some banks but generally if you open the account where you have your personal banking relationship it does not cost.
We are unable to open company bank accounts in which the owner is another entity (i.e. trust, LLC, corp).
This is what we were told: "I discussed setting up your account with my operations manager and unfortunately we wouldn’t be able to open your accounts based on multiple layering."
So, if the company is owned by another entity, how can an account be opened?
Unfortunately you may need to look at another bank. I use Chase and WF.
@@ClintCoons I had an experience with Wells Fargo but mine was that they told me that the business address which was a physical address of a registered agent service would not be acceptable as our business address. I am not located in Wyoming but my holding company was to be there so I used the registered agents address for the business. In my case I was the owner of the account, not an imbedded account owned by another LLC but was still denied. What do you do in this case? AJ
@@alejandrojauregui1493 I provide my home address when opening the account.
What if I have a Series LLC? Do I need an acct for every series?
No you do not. Check out my channel with the series LLC videos.
Hi Clint!
I am a real estate investor and also have a staffing company.
I am a credit card points junkie and would love to pay everything on credit cards. With that in mind would you say option two is best for me? I don’t want to have a ton of credit cards.
Yes
@@ClintCoons would it be acceptable for me to have a single operating company that all income and expenses flow through for all real estate and my staffing company, other future companies as long as that operating company distributes money out of it to the other LLCs?
@@connormather9941 Yes you could do this but I would be hesitant to mix staffing and RE management.
@@ClintCoons sounds good! I will keep it separate!
Thank you so much Clint!
My local chase here in Florida told me I need to file my WY LLC as a foreign entity in Florida in order to open a bank account which defeats the purpose of complete anonnimity
BS. Did you provide the bank a local address when opening the account or did you attempt to use a WY address?
@@ClintCoons I gave them my Wyoming address. I think the manager had no idea what they were talking about
@@rheacecontracting what was the outcome?
What if your LLC is on a flip house? How would we set up our bank accounts for this type of scenario?
You can set up a bank account in the LLC or use the parent corporation. Best course of action would be to set up an LLC account.
@@ClintCoons Thank you. So, if I need an LLC for every flip, and I will need to close the LLC when I sell the flip, then I will need a bank account for that flip and I will need to closed that account once I close the LLC? correct? or use a parent company and keep very good records on all my flips?
@@jerryhouse59 Either way is used by investors we work with. Some prefer to use the LLC account for cleaner books and others have a good system in place and instead use the corporation.
Clint - I have a bank account for foreign LLC in Illinois. Will I need a different bank account for land trust to collect to collect the rent? Also will my lease agreement be in my LLC name or in my Land Trust? Thank you in advance.
Lease agreement will be with the land trust and you will need a bank account for the land trust.
@@ClintCoons thank you Clint. Hv booked a call with one of your associates for me business structure and estate planning.
@@sunilsharma707 were you able to open a bank account for a land trust???
What if you are flipping properties?
Typically with the corp and not the individual LLC
So here is my question. To start out the LLC, lets say purchasing inventory of merchandise to sell or purchase advertisement on social media, how do you go about injecting funds into that account without pulling away the corporate veil?
Could I withdraw physical cash from my personal account and then deposit into my LLC account so neither show connected?
What address do you use for each LLC? The LLC's address?
Anything but your personal address. We provide an address to our clients then forward any mail we receive on behalf of their entity.
@@ClintCoons Great, I am a new client and I'm sure I will be guided through this. So much to learn!
@@josephsteinheiser2902 Great. Thanks for becoming a client. If any structuring questions come up feel free to email me. You are in great hands with Michael H.
So hypothetically speaking, I could have a bank account set up for my property management (LLC) which receives the rent payments, but then I could also have an account for the Land Trust (property) which is where the property management would pay rents to (minus expenses etc etc) correct? And since the LT is owned by the holding company I'd be sending a portion of said rent payments up to that right? Can you tell I've been watching your videos for a few years? 🥷🥷
I would skip the land trust account and instead have the money run through the beneficiary LLC then to the holding LLC