I’ve done some reading on using an LLC to hold investment property and saw that the rules state you should keep your personal funds totally separate from that of the LLC. I would think a large number of investors are like me and at least at the beginning, are constanly using personal funds to get pick up rental properties and pay for expenses. I plan on a couple of flips later on but for now, im using personal cash to fund my investments.
Any thoughts on this. Supposably you put the LLC vail at risk of penetration if you use personal funds to pay for thinks for the LLC.
Thanks for any input,
Yes, you should ALWAYS keep your personal finances seperate from your business finances.
There are a couple of solutions to this issue:
Loan your LLC cash. then the LLC can use the cash for whatever. LLC pays you interest/principal when the note is paid off. Be sure to actually execute a promissory note and go through all the legal details. It’s important.
Use your cash, but submit expense reports that show up as liabilities on the LLC until the LLC can repay them. I usually use this only for small, incidental expenses.
Mark Wagner, CPA
Greg,I really need to read up on LLC.I didn’t know that if you used your personal funds for the LLC it was at risk of penetration.My sister and I are starting up with the rehab and selling and we are going to use some personal funding for the job.I love reading this sight.It gives you soo much info!!! Thanks,Michele
I agree, great information exchange on this site.