Flips and Rentals under one business a good idea? Bookkeeping?

[Mark Fletcher]

I started an LLC for the purpose of wholesaling. I haven't successfully wholesaled anything yet, but I'm about to purchase a rental property. I expect to still wholesale some properties in the future. I know of several other businesses doing both flips and rentals under the same company, but my main question... what is the best method for managing this in quickbooks (or possibly another platform)? I have an accounting degree so I can navigate this with some guidance. I know with multiple rental properties, you just setup different classes for each property. I assume maybe the same method would be true for the flips. Just trying to begin with the end in mind and have everything well organized from the beginning.

I also like the idea of doing everything under one program with Buildium as it offers property management and accounting systems, but wasn’t sure if it would be sufficient to record flips or wholesale information.

[Ashish Acharya]

Originally posted by @Mark Fletcher:

I started an LLC for the purpose of wholesaling. I haven't successfully wholesaled anything yet, but I'm about to purchase a rental property. I expect to still wholesale some properties in the future. I know of several other businesses doing both flips and rentals under the same company, but my main question... what is the best method for managing this in quickbooks (or possibly another platform)? I have an accounting degree so I can navigate this with some guidance. I know with multiple rental properties, you just setup different classes for each property. I assume maybe the same method would be true for the flips. Just trying to begin with the end in mind and have everything well organized from the beginning.

I also like the idea of doing everything under one program with Buildium as it offers property management and accounting systems, but wasn’t sure if it would be sufficient to record flips or wholesale information.

 Few things: 

1) Yes, it is totally doable. 

2) But, subjecting liability from one line of business to another is not right legally One activity has higher/Lower risk.  

3) Also, if you ever make good profit in Flips, the fipping activity is recommended in an S-corp but rentals in LLC. So both rentals and Flips under an LLC or under S-Corp together has bad tax implication.

In my opinion, ease of bookkeeping should not drive this decision. You should consult attorney for legal advice and CPA for tax advice.