All Forum Posts by: Antonette El Baz

As an accountant specializing in real estate, I typically work with clients who use QuickBooks Online (QBO) for their bookkeeping. One way to organize and keep track of properties in QBO is by using classes.

Classes in QBO allow you to categorize transactions into specific groups, such as different properties. This makes it easy to see the financial performance of each property and track expenses and revenue specifically for each property. To set this up, you can create a class for each property and assign all transactions related to that property to its corresponding class.

For your client who is just starting out in investing in rental properties, I would recommend setting up a separate class for each property in QBO and using it to track all financial transactions related to that property. This will provide a clear and organized picture of the financial performance of each property, making it easier to make informed decisions about future investments.

Classes and tags in QuickBooks Online (QBO) serve different purposes. Tags are more general and can be used to categorize transactions for easy filtering and searching, while classes are a more specific tool for categorizing transactions into different departments, locations, or property units. Classes provide more options for advanced reporting and give you a more detailed view of your business operations, including the ability to see the performance of each property unit in a graphical representation.

If you are a real estate investor, it is recommended to use classes in QBO for tracking your property units as they provide more reporting options and a better view of the business performance. Using classes can also make it easier to separate transactions for tax purposes.

In terms of QBO vs. Stessa, QBO offers a wider range of features and integrations, including financial management, invoicing, payroll, and payment processing. On the other hand, Stessa is focused on real estate investment tracking, so it may be a better option if real estate is the main focus of your business. Ultimately, the choice between QBO and Stessa will depend on your specific business needs and priorities.

I highly recommend QuickBooks Online for your real estate business. Not only does it allow you to manage your rental properties, but it also has a feature for class tracking which can help you keep track of your flipping and retail listings. QuickBooks Online is user-friendly and offers a variety of features such as income and expense tracking, invoicing, and reporting. It also allows you to access your information from anywhere, as it's cloud-based. Additionally, there are various tutorials and support available online. Buildium can also be a good option but QuickBooks is more robust and customizable.

Refinancing or cashing out your primary residence to purchase a 4-plex could be a worthwhile real estate investment strategy, but it depends on your specific financial situation and goals. It's important to consider the potential risks and benefits of such a move, to determine if it is a good decision for you.

In your case, you're looking to cash out $200k for a down payment on a fourplex that is selling for $999k and cash flows $3k. That is a positive cash flow, but you should be aware that the property's value may not appreciate as much as you would like, and you will also have to consider ongoing expenses, such as property management, repairs and maintenance, and property taxes. Additionally, you will have two 30-year mortgages, which means a longer time period to pay off the mortgages, and that may have an impact on your long-term financial goals.

Overall, it's a good idea to consider all the factors and to consult with a financial advisor or real estate professional before making a decision.

One book that can be a helpful guide for real estate investing is "From Confusion to Confidence: The Essential Guide To A DIY Real Estate Accounting Approach For Achieving Financial Success". This book is aimed at providing the reader with a comprehensive guide to the accounting and financial aspects of real estate investing. It covers topics such as budgeting, expense tracking, tax planning, and cash flow analysis, and is designed for both novice and experienced investors.

Remember that when it comes to real estate investing, the more knowledge you have, the better prepared you will be to make informed decisions and achieve financial success.

An LLC can open a business bank account and collect rent from tenants through that account. This can provide some separation between your personal finances and your rental property business. Having a separate business bank account can make it easier to track income and expenses for the rental properties, which can be helpful for tax purposes and record-keeping.

It's also a good idea to have a separate LLC for each property, that way you have a separate legal entity for each property you own. This can help protect your personal assets if something goes wrong with one of the properties.

It's also important to note that LLCs are not able to get a loan from a bank for a property, but as an individual, you can still get a mortgage using your personal name and then have the LLC pay the mortgage. This way you have the LLC protecting you personally and you can still get the mortgage.

Keep in mind that it's always a good idea to consult with a lawyer or accountant to make sure you are setting up your LLC and bank account correctly and in compliance with state laws.

There are a few things you may be missing when analyzing cash flowing properties. One potential issue is that you may not be including all of the expenses associated with owning a rental property in your analysis. Expenses such as property management, vacancy, and repairs should be factored in to determine the true cash flow of a property.

You may want to consider looking into properties that need some work, as they may be priced lower and can potentially provide a higher cash flow after the repairs are made. You may also want to explore alternative financing options such as owner financing or hard money lending, which can potentially reduce the amount of money you need to put down and increase the cash flow of a property.

When it comes to accounting for revenue from a short-term or vacation rental, it's best to follow the accrual method of accounting. This means that revenue is recognized when it is earned, regardless of when the payment is received.

In your case, since the guest stay started in December and ended on January 1, you should recognize the revenue for the entire stay in December. This is because the guest has occupied the property and has received the benefit of the rental during that time period. The revenue should be recorded in December's income statement.

It's important to maintain detailed records of the rental income and expenses for each property in order to accurately report your income and expenses.

You should account for the entire revenue from the guest stay in December's income statement, however, it's important to consult with your accountant or CPA to ensure compliance with the tax laws.

Congratulations on your first investment property! When it comes to cheap accounting and bookkeeping software, I would recommend QuickBooks Online (QBO) to you. QBO is a widely used and trusted software that is designed for small businesses like yours. It offers a range of features that cater to real estate professionals and is user-friendly and easy to navigate.

QBO has a very affordable pricing plan that starts at $20 per month, which is perfect for small businesses like yours that only have one property. It offers features such as income and expenses tracking, rental property management, and detailed financial reporting. It also has a mobile app that makes it easy for you to access your financial data on the go.

You can also try out QBO for free for 30 days before deciding to subscribe. Additionally, there are plenty of resources and tutorials available online to help you get started. QBO is a cost-effective solution to your accounting needs and would be a great tool to help you manage your financials for your one property.

Ever thought about outsourcing your bookkeeping service to manage your real estate business's finances? I have experience working with clients who use QuickBooks Online (QBO) and have a mix of rental properties and flips. I understand the unique accounting needs of real estate businesses and can help you track all your financials effectively.

I am familiar with the best practices for classifying flips in QBO, whether they should be treated as short-term or long-term investments. I can also set up "classes" in QBO to track each property separately. Additionally, I am well-versed in the tax benefits of using an S Corp to treat each property as inventory, which can save you on short-term gains.

Don't waste your valuable time on bookkeeping when you could be focusing on other important aspects of your business. I highly recommend outsourcing your bookkeeping to a professional who is an expert in real estate investing. Once your books are in order, then you can send your file to your CPA for ease of filing taxes. It's also a great opportunity for you to learn about QuickBooks and understand how it can benefit your business.