How to Separate Personal and Deal Money in a Real Estate LLC
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Separate personal and deal money with a few habits: each deal LLC gets its own bank account and card, the sponsor is paid only what the operating agreement allows, any loan or extra contribution between you and the company is written down, and every payment has a record of who paid what and why. Mixing money (commingling) is a common reason courts and accountants question whether an LLC was treated as a real, separate company. The rules differ by state, so ask your own attorney.
Open an account: Mercury or Ramp. DoorRaise may earn a referral reward if you sign up through these links. DoorRaise's suggestion: Ramp by default, Mercury if the company will usually keep under $25,000 on deposit. A new deal LLC cannot open Ramp before closing (Ramp needs at least $25,000 in cash), so it opens Mercury first to receive the closing funds and can move to Ramp after closing.
The four layers of money
| Layer | Where it lives |
|---|---|
| Personal money | Your own accounts and cards |
| Sponsor company | Its own business account and cards |
| Each deal LLC | Its own account, reserve account and card |
| Investor purchase funds | Escrow until closing |
Rules that keep it clean
- Pay from the right place. If you pay a deal expense personally by mistake, record it as a reimbursement due, with the receipt, and have the LLC repay you from its own account.
- Contributions and loans. If you put your own money into the LLC, write down whether it is a capital contribution or a loan, the terms and the date. The operating agreement should allow it.
- Sponsor pay. Fees and promote follow the operating agreement, paid from the LLC's account to the sponsor company's account.
- No personal cards for deal bills unless you record and reimburse them.
- Transfers between LLCs need a written loan or similar record; avoid them.
- Keep a ledger tied to the cap table and the bank statements. See capital account statements.
Worked example (illustrative)
A sponsor pays a $400 repair bill with a personal card by mistake. The same week the sponsor files the receipt, notes it as a reimbursement due from Cedar Court LLC, and the LLC repays $400 from its operating account. Both sides show the same record. Names and numbers are hypothetical.
Related guides: Bank accounts and cards and Syndication LLC bank account.
How DoorRaise fits in
DoorRaise forms the deal's LLC and its EIN, holds investor purchase funds in escrow at Enterprise Bank & Trust (investors send wires only), and helps the sponsor open the deal's Mercury account in the LLC's name after closing. Fees: $1,500 to set up (non-refundable), then $5,000 a year from closing. See the bank account feature.
FAQ
What is commingling?
Mixing personal and company money in one account. It weakens the LLC's separate status and makes books and K-1s hard.
Can I pay a deal expense from my personal account?
Avoid it. If you must, document it and have the LLC reimburse you.
Can the sponsor take money out of the deal account?
Only through fees and distributions defined in the operating agreement.
Sources
This article is general information as of November 2026, not legal, tax or investment advice. The example is hypothetical. Ask your own attorney and accountant. DoorRaise is not a bank, law firm, broker-dealer, investment adviser or funding portal.