All Forum Posts by: Allen Hayes

Does anyone have recommendations for a good software solution for managing the maintenance activities for properties?  We have several partners splitting up the management tasks and a couple of handymen we use regularly as well as select contractors for specialty fixes. The problems we're having are that the coordination of who is sending which handyman to which property is causing confusion, frustrating the handyman, tenant, and owners.  The primary task I need in the software is logging issues, who's to fix, when, etc so that we can schedule people better.  If the software handles payments that's great but we use excel now and haven't had issues so it's not a critical need.

I don't know much about Louisiana so I can't speak to specific rentals or buying flooded property. 

For your more general questions: It depends.  I only do stuff where I own the property, not just the unit so to me single family is the way to go. When you are in a condo you have more variability from the condo association that you can't control.  Plus side is you don't have to deal with exteriors so it might not be a bad plan.

LLC's are overrated anymore. It's very difficult to not do something that'll pierce the corporate veil. If it's just a single family home you could look at getting a million dollar umbrella policy to cover any issues.

@J Scott, yeah you're describing an operation more significant than just someone with a couple of flips going on.  A spreadsheet isn't going to cut it for that.  You're going to need a real accounting system and probably a bookkeeper to keep it all recorded if you're operation is that large.  For a small timer, that's all overkill.

@Aaron McGinnis, yeah you're way past the point of spreadsheets. I still think you could leverage some subledgers to clean up the main ledger and make things more transparent but if what you have works for you then awesome.  I couldn't figure out how you could possibly be doing that many entries while doing any work, but it's because you have employees who's full time job is the accounting work. 

Like I said above, I think Excel is good for sole proprieter with no employees. As soon as you get a couple of full time employees it's time to start looking at QB and the like, at a minimum I'd get ADP or something like that for the payroll accounting.  I'd note though that you have almost 15-20% of your labor going to maintaining the accounting.  Since you can't do anything else with an accountant (she's not likely to start making cabinets in her slack time) it's a non issue, but before adding accounting staff look at streamlining your books. 

Sorry maybe, I'm confused here, what are you calling a transaction?  How detailed are you breaking out your GL?  I'm really not trying to get into an internet argument over accounting systems. I really just can't figure out how you produce so much volume per project.  Just keying that many entries would consume days, maybe a week even, every single month.  I fixed up a 3bedroom/1 bath house that was had it's plumbing and AC stolen and the bathroom floor rotted out and I couldn't have created 100 GL entries without breaking out every receipt at a line item and every trip by itself. 

@Will Romero pretty much what they said. My REO purchases took 6 months to close on average. Either wait if it's a good deal or walk away. Keep checking on the property if you're going to wait though. I've had to hang plywood myself to limit water damage from a loose door (wasn't going to break anything that they'd have to repair, just cause me problems in the remodel), I've also told the bank to get someone to clean up trash left behind by illegal dumpers. Your contract should state that your buying the house in the condition it was when you initially offered, if it deteriorates or threatens to let them know to fix it or get a contractor to remediate the problem while it's dragging out.

Why aren't you leveraging sub ledgers to maintain some organization to your ledger?  You've got to be either dragging a lot of extra info the main ledger to support sub ledger functions or you're missing details you could use for reporting because youre main ledger can't support all that information. How many employees do you have supporting this thing?

@Aaron McGinnis, if you're doing hundreds of entries per month you're beyond the scope of what I was talking about.  Frankly, if your company is doing hundreds you're not going to be on BiggerPockets at all.  My system is a basically the same as the old 2 column paper ledger, just in Excel so you don't have to add it yourself.  You are correct that it doesn't scale if you get employees but it's because of audit trails and controls and employee taxes.  A spreadsheet doesn't offer the ability to see who is making or editing entries so it's high risk for fraud and computing payroll taxes is a freaking nightmare.  Once you have an employee, get an accounting system that has payroll plug ins.  Loading historical data in is something your accountant should be able to do very easily.  Yes, you'll have to learn a new program but you'll already have your accounting system down. 

To go beyond the scope of the forum question, if you do get an employee, get a pro to help you set up business processes to make sure they can't defraud you blind.  Reconciling cash accounts and approved vendor lists is a huge thing that everyone should do. Also, don't be afraid of subledgers.  My rent receivables is it's own form, lets me track a lot of details about rents, renters, dates, notes, etc without blowing up the ledger with stuff it doesn't need.  At the end of the month I just record the totals to the ledger.  If you're doing 2 house flips and need to keep the expenses seperate just keep subledgers for each then record the totals to the ledger.  Also, don't be afraid of recording things at a higher level.  I make an entry for the lowes bill, not for every blind and board I buy. 

@Aaron McGinnis

Current month activity looks like:

Now just add a pivot and you can see your net cash, net utilities, etc.  This is way more readible in a pivot with pretty formatting.  Makes it pretty easy to reconcile cash changes and all that fun stuff.  If you get bored you can make different pivots for the same data to show it as income statements, balance sheets, by property, etc.   

I'm a corporate accountant and use Excel. My personal opinion is that QB and the like are good for very big companies with a complicated portfolio and your accountant who can just import the data and saving him work.

I have 5 properties, 27 total rental units that have needed a ton of work each.  Currently running it on 5 tabs, one for each property then consolodating to a reporting tab for summary results.  In the future with more inventory I'll just put it on one tab with different columns to give it categories and keep it straight, just throw a pivot table/pivot chart over it and you have all the reporting you need. 

Columns:

Month:Property:Account:Amount