All Forum Posts by: Ben Day

@Cassi Justiz

Thanks for the mention cassi!

Heather - there’s a lot of options for you on BP to solve this problem.

Just as a heads up - anyone who isn’t a bookkeeper can refer people to you in Forum posts, but people who offer accounting and bookkeeping services will be flagged and reported if they try to sell you anything anywhere outside of the BP Marketplace posts. ThIs helps to separate the “sales“ from the “education“ elements of BP.

This post should be fine for collecting referrals, but if you’re looking to get answers straight from the horses mouth I would either 1) make a marketplace post, or 2) message and connect with accountants and bookkeepers directly.

Good luck! Please let me know if I can answer any questions!

I Love BiggerPockets. 

I think this platform is, bar none, the best place to find out about real estate investing and build a good plan for the future. 

I think it's well on it's way to being the only social media platform a real estate investor needs.

Unfortunately, there's always different technology emerging that does a better job at giving out information. 

If you're ready to build your business and your portfolio, actively pursue your goals, and looking for more information about how taxes work, what bankers and lenders are looking for, and how to turn your investing business into something that will buy your groceries, pay off your loans, and send you on 52 weeks of paid vacation a year: 

May I humbly present:  Lionshare Bookkeeping (click here!)

When we're not on BP, we do the thing you always hear about: Share content on Facebook and Linkedin. 

Every week we're generating content - blog, video, commentary - on what it's like being a real estate investor and what kinds of weird, complicated, and advantageous things buying real estate does to cashflow and accounting. 

This is "Level Zero" stuff. If you have no grasp of accounting and no desire to truly understand it, you're in the right place. If you're looking for "Level One" tips - we have that in spades: 

--- How to Educate your CPA on how your taxes should work 

--- Why and When being "upside-down" in your rental is a good thing

--- How to Make your Flips look like Solid Gold to your Lenders

--- Meeting your Banker's Weird Requests: Non-Recurring Expenses and Debt Coverage

--- How Accounting for Wholesales and Assignments is Totally Different than Flipping, Construction, and Rentals

--- Single Family and Multi-Family: How and When to Scale your Portfolio

--- Why "Property Management" Bookkeeping is Fundamentallly Flawed 

--- Preparing for 1031 Exchanges 

--- How does Depreciation Actually Work

We specialize in Bookkeeping for Real Estate Investors. If your books aren't ready for tax season, lenders, or for personal distributions - we can do that, and we can definitely talk with you about that. 

See you soon! 

@Jason Turo

Thanks @Cassi Justiz!

Personal Financial Statements are real fun. Since you’re not looking for budgeting, the “accounting” version of what you’re asking for is a balance sheet.

You can always go the “free” route and make your own. With a little education and a fair amount of time you could have something awesome.

The other route is for a “paid” version like Quickbooks. This would give you a great tool for your balance sheet as well as help with other accounting issues, and Is much faster.

Personally, I think the best thing is a blend of Quickbooks and other “custom” reports. QB is great for tracking book value but it doesn’t get you the whole picture or help you strategize your portfolio.

It really depends on you, your goals, and your timeline.

@Daulton H.

Hey Daulton!

So, in order to do this, you’ll need two things:

1) accurate and consolIdated accounting with all of the details entered correctly. Up to date and knowledgeable bookkeeping will give you the raw and aggregate data points you’re looking to use. Quickbooks is great for this!

2) knowledgeable financial analysis that measures the “right” KPIs and ratios you’re looking for. You’ll find that there’s a lot of different financial analysis software options, and a lot of them work with Quickbooks. You’ll also find that these softwares can be expensive for the kind of analysis you’re looking for.

Personally, I like to make sure #1 is perfect before trying to start #2. Some of this “advanced reporting” is amazing, but most of it you can do by dividing two numbers you find in your accounting software. Best case, you have your bookkeeper or accountant put together some custom reports giving you the numbers you’re looking for. Depending on what you’re looking for this could be free or cheap as an additional service.

@Anthony Ventura Yeah! Use the Meetup app. Next Wednesday there’s OKC Real Estate Investor coffee meetup at Starbucks on Memorial and MacArthur I think? The next day is Millionaire Possibilities REIA. There’s four different meet ups the next week, and a few events the last two weeks of the month.

@Anthony Ventura Yeah! Use the Meetup app. Next Wednesday there’s OKC Real Estate Investor coffee meetup at Starbucks on Memorial and MacArthur I think? The next day is Millionaire Possibilities REIA. There’s four different meet ups the next week, and a few events the last two weeks of the month.

@Kyle Pierce

Hey Kyle!

It definitely depends on what you’re looking for, and who your bookkeeper is. I’ve noticed that general bookkeeping contractors will bill at an hourly rate that could be all over the map.

The more popular and blatantly effective way to pay for bookkeeping is through flat rate pricing. This way you and your bookkeeper can define the scope of your engagement, you don’t get surprised by any extra “hours worked”, and you have more control over your bookkeeping costs.

Everyone has different pricing for this. It mostly depends on the end result you’re looking for. Quarterly reports will bill differently than monthly reports, and what is included in those reports will vary between providers. The most important thing is finding a knowledgeable bookkeeper that meets your requirements.

Hope this helps!

Hi @Christopher!

Congrats on your business! It sounds like you’re in for some fun!

The absolute best and most important rule for making a CoA is: keep it simple. Sure, you could have a million subaccounts under repairs for every little thing you replace. Just remember that you’re making your financial statements and your taxes more complicated by doing this.

A lot of the time investors want this super-granular data for their rehabs. I’m all about that! If anything I would make sure each capitalized improvement expendIture is correctly documented so that you can find this data if you need it. This will also make it easier to do any “advanced” tax stuff like cost segregation.

You need to know the costs per property, but a huge CoA can become burdensome. By keeping a papertrail and becoming good at determining ERC and ARV, you'll knock out most of this problem. Focus on general estimates vs. "big ticket" estimates to give you a good foundation on this kind of analysis, and make sure that you're doing the accounting correctly when it comes to recording expenses as repairs vs. capital improvements. If you've got everything documented, you'll be covered once tax season rolls around and you'll be able to break out those costs without overcomplicating your bookkeeping.

The absolute most I would do is keep a running ledger of your rehabs and tracking costs that way. Then you can compare your estimates against the actuals and satisfy your financial analysis without overworking your books. After that, any capital improvements get added to the asset subaccount and are easy to manage.

Hope this helps!

Hey Jason! Congrats on your new rentals and growth! So, unfortunately, there’s no good way to move data from Buildium to Quickbooks (or anything). This is primarily because Buildium is a “one stop shop” style software, and just doesn’t want to play well with others. But I do think you’re spot on: having one consolidated place to have the information for your business is important. There’s plenty of costs associated with your business that your PM either doesn’t know about or doesn’t care about. And unless your PM is an absolute rockstar, they’re not tracking anything related to your assets, loans, or equity. Dedicated accounting and bookkeeping should definitely be on your radar. Depending on the specifics of your business, it could definitely be worth having a professional handle this work for you so that you can focus on other things. A service like this would not only consolidate your business, but also prepare you for tax time and make your conversations with lenders much, much easier. Good luck!

Hey Ryan! Sorry to hear about your tax and bookkeeping issues from last year! For people that are just starting out, there’s nothing better for finding income and expenses than having separate bank accounts for business and personal. The sooner you can do this, the sooner you’ll have a register of all the things you do/don’t have to pay taxes on! As far as bookkeeping software goes, there’s some free and low cost options that may help you a lot! Also, a lot of people don’t know that bookkeeping and accounting firms can get discounts on accounting software. It might benefit you to engage someone that understands real estate investing to be able to take advantage of these discounts, as well as use them to double check your work until to you grow to a point where it makes sense to outsource. Excel is a great option too. Just remember that if you’re the person building the spreadsheets, you might be the only person that can understand or audit them! It’s not great having a system that can’t be checked for accuracy. Good luck!