How is everyone storing and keeping track of all the paperwork. I keep a small file folder for all my bills through the year and at the end of the year, I put them in a large cherios box and then write the year on the box. I can only imaging the volumne of paperwork that must be involved if you had say, 4 or 5 house deals in a given year. The stack of papers from the mortgage for my current house was nearly 3/4 inch thick.
ideas ? would like to hear from those who are doing 3-4 deals per year.
Has anyone gone all digital ? Possible ideas involve using Adobe fillable forms. im a computer programmer by trade, so Im always looking at ways to automate things.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
I have lots of the information on compter, but there is almost always paperwork, receipts, etc. that are not. For that, I keep a file folder and label everythhing, then store in a filing cabinet.
Cherrios box seems too bulky to me. A standard flining system with cabinet should do fine for you.
Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
17y
I certainly do all my bookkeeping electronically, but I also have a specific system for keeping track of paperwork.
I mainly do flips, and for each property, I keep 5 color-coordinated file folders (all yellow for one property, all green for another, etc):
1) Purchase: This holds all my purchase information, such as Purchase and Sale Agreement, Addendums, HUD-1, CMAs, etc.
2) Holding: This holds all my paperwork related to holding costs. This includes insurance, utility bills, mortgage statements, property tax info, etc.
3) Rehab: This holds all my rehab paperwork, including contracts, bids, estimates, scope of work docs, material lists, etc.
4) Selling: This holds all my selling info. My listing agreement, my marketing materials, offers, etc.
5) Financials: This holds all my receipts -- everything from the earnest money receipt to all my materials purchases.
I also use those first four categories (Purchase, Holding, Rehab, and Selling) as my major categories for tracking all financials. Every cost on a project gets allocated to one of those areas, and in the end, the sum of them all indicates my overall profit or loss.
For example, here's an example of the final financials for one of my flips:
(that 5th category -- Commission Costs -- is specific to the fact that my wife own a real estate agency, and so some of our commissions flow back to us)
The mention of using a cherios box is just simply what im using to store my personal paperwork - utility bills, reciepts etc. After 3 yrs, I just throw the box and all in the burn barrell.
For business paperwork, I plan on keeping things in something a bit more structured. I probably will need a filing cabinet.
Real Estate Investor · OH · Member since 2008 · 194 posts · 89 votes
17y
Portal,
I try to keep things as simple as possible. I have two folders for every deal based on the property address in two different colors. I have one folder for everything pertaining to the purchase of the home and all requisite paperwork. I have a second folder of a different color with all the records and paperwork pertaining to how I occupy the home (which for me is usually a lease option). I also have a checklist for each type to make sure I don’t forget anything in the process on either side. Some examples in the buying a home folder are things like title search, taxes current, contact info for all utilities, closest schools, authorization letters to talk to their lender, limited power of attorney and on and on. As I do things I will check it off to make sure I don’t forget anything.
Any bills or expenses are posted to my accounting software and filed to the appropriate folder. So I have good records to support any action I have taken should I ever be audited, need to prove expenses or at tax time.
Just set up a good system and don’t take shortcuts or get lazy to keep all your ducks in a row. Your accountant will thank you and you will be able to find any thing quickly down the road when, not if, you need to refer to anything. It is harder explaining it than doing it.
Rental Property Investor · Nolanville, TX · Member since 2008 · 130 posts · 88 votes
17y
If you have all that paperwork I would say take it to Kinkos and have them scan it all and organize it for you. Get meticulous with your organization of it.
You probably have a back up drive. Back your files onto an external HDD or disc (depending on the size of the files) and store in a fireproof safe. You should be good to go - your own data center.