Rental Property Investor · Orlando, FL · Member since 2015 · 131 posts · 62 votes
Fortunately, I have had the opportunity to learn from everyone here on BP while beginning to invest in properties out of state. I live in Seattle right now and have a Triplex and SFH in Orlando FL. Both have positive cash flows and were essentially turnkey properties.
My question as a new investor, is what tools do some of you use to track Capitol expenditures, taxes, etc?
I have a management company doing a great job sending monthly statements of my cash flow less any expenses and provide me with a year end review for tax purposes. I keep most receipts and leases in a filing cabinet, but that is it.
My goal is to purchase one more multi family, hold it, and use the equity and cash to break into a 30 unit complex so any suggestions on tools that can scale with me would be great.
Cincinnati, OH · Member since 2015 · 20 posts · 10 votes
10y
I recommend Xero for your financial tracking. With the add-ons you really can run your business with more accurate and up to date data. Best thing is, it is cloud accounting software so you can run your business from anywhere you have an internet connection.
If you have any questions DM and I can help you figure out what exactly you may need. Thank.
Cincinnati, OH · Member since 2015 · 20 posts · 10 votes
10y
I recommend Xero for your financial tracking. With the add-ons you really can run your business with more accurate and up to date data. Best thing is, it is cloud accounting software so you can run your business from anywhere you have an internet connection.
If you have any questions DM and I can help you figure out what exactly you may need. Thank.
@Christine Sykes congrats on getting started, especially in Seattle! The market is ridiculous IMHO in the downtown Seattle area. I chose Orlando for a few reasons...
1) I was familiar with the area ( I was born and raised there) and had some contacts that connected me with a few good property managers and realtors.
2) immediate cash flow. Although I could pull off a FHA loan out here in Seattle and live in one of the units, not many of the units matched what I was looking for in terms of cash flow. A lot were negative at the end of the month (in the greater Seattle area). Many members on here say if money is an issue you can look elsewhere/analyze more deals/etc. I just accepted the fact that I was going to not live in the units and invest elsewhere where I could break into the market.
Sebastopol, CA · Member since 2016 · 50 posts · 14 votes
10y
Thanks for answering, @Josh Calcanis! The Seattle market is nuts right now. I lived in my West Seattle house for 8 years, then rented it out when I had to move. For what it's worth, I love the property management company I'm using. Very good experience for the last two years.
Of course, the Bay Area where I am now is just as crazy. It might be challenging to find properties here, I think.
Cincinnati, OH · Member since 2015 · 20 posts · 10 votes
10y
@Josh Calcanis there is a monthly fee for the program and it depends on the size of your organization. $9-$70/mo. They are currently doing 40% off until the February 15th. I can also get you set up with a free trial. Check them out. Like I said, if you have questions I can answer them.
Full disclosure I am a certified Xero advisor so I am biased. But our firm chose Xero because we truly believe it the beat software for our clients.
Sebastopol, CA · Member since 2016 · 50 posts · 14 votes
10y
@Josh Calcanis, I use Cayce Real Estate Services. I've been very happy with them. They were a godsend when I first started renting my house, and the place needed a bunch of repairs. They totally handled it, and are a main reason why I've had such an easy experience with landlording so far.
@Christine Sykes congrats on getting started, especially in Seattle! The market is ridiculous IMHO in the downtown Seattle area. I chose Orlando for a few reasons...
1) I was familiar with the area ( I was born and raised there) and had some contacts that connected me with a few good property managers and realtors.
2) immediate cash flow. Although I could pull off a FHA loan out here in Seattle and live in one of the units, not many of the units matched what I was looking for in terms of cash flow. A lot were negative at the end of the month (in the greater Seattle area). Many members on here say if money is an issue you can look elsewhere/analyze more deals/etc. I just accepted the fact that I was going to not live in the units and invest elsewhere where I could break into the market.
There are cash flow opportunities here in the Seattle area (1% to 1.5% rule and rarely 2% rule) in Tacoma, Lakewood, Lacey, Tumwater, Olympia, Yelm, Arlington and Mt Vernon. But they are C class areas and B- areas at best. I have many rentals out of state and was buying between 2010 and 2013 in A class areas. But those A class areas for overpriced and the 2% rule deals got harder to find through turnkey providers, and so I am buying rentals again in the Seattle area.
Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
10y
I have found that the simplest way starts with having a separate banking account for each property. You can set up a business account by first registering for an EIN (employer's identification number) through the IRS. It is free and all you need is your SS#. Simply google "get an EIN number" and you will see. Takes 3 minutes.
Once you have your EIN number you can set up a business checking and savings account at your bank of choice. Use the savings account for security deposits and possibly capEX reserves. Use the checking account for all rent deposits and ALL EXPENSES. Then simply use the bank's online banking portal to generate monthly and/or annual reports in CSV format. I've been keeping all of them organized on my google drive.
Sebastopol, CA · Member since 2016 · 50 posts · 14 votes
10y
@Ryland Taniguchi, I am definitely considering buying again in the Seattle area, since I lived there for 20 years and know the neighborhoods pretty well. One of my goals is to rehab my house in West Seattle (built in 1918) whenever I can afford it. It really needs to be updated!
@Max Tannenbaum, thanks for the tip about opening a separate bank account! I will consider it going forward.