All Forum Posts by: Ben Day

Hey Andrew! So a good bookkeeper will do more than just put the numbers in the right place. A bookkeeper that understands real estate investing should be able to fill a number of CFO advisory level roles, including working with bankers and lenders, scaling your business, and long term strategy. All of this in addition to being “tax-ready”.

You should definitely do both. If the accountant you talk to isn’t familiar with real estate, they may advise you do something that isn’t in your best interest. If the banker you talk to doesn’t understand real estate investing, they may not give you the loan, regardless of if you’re incorporated. Smaller, community banks are where you want to start. Develop a relationship, see if they’re savvy, and if they know real estate most high quality lenders will spend extra time with you making sure that you are organized in the best way possible for them to give you money. That’s where you want to be at the end of the day. These lenders will probably want you to look for an accountant or bookkeeper to keep your records in order, but may not stress it early on. These lenders will also probably have contacts for lawyers, cpas, and bookkeepers they’ve used before. Again, vet these people out and make sure they’re knowledgeable of real estate investing, otherwise that’s time and money lost.

Lionshare Bookkeeping specializes in working with real estate investors. 

We serve businesses in all of the major areas: 

Inventory - Flips and Construction: Tracking by project, bank draw statements, profit margin monitoring. You focus on the project, we'll do the bean counting for you. 

Service - Wholesales and Assignments: Cashflow analysis including advertising, earnest money, and all the fun expenses involved in helping your buyers and sellers get to "yes" 

Passive Income - Rentals: Track income and expenses by property, measure your business overhead, and close your loans faster with specialized reports built for lender analysis

Our Focus

Make tax time a breeze: Stop stuffing your shoeboxes full of receipts and stressing out when the new year rolls around. We'll help you stay organized and help you talk with your tax preparer. 

Always bank-ready: Walk into lender meetings with a firm idea of your options. Eliminate the guesswork at refinance or "bank-ability" and generate leverage without sacrificing profit. 

Maximize your business cashflow: Never feel in the dark about your own business again. We help investors find and understand their cashflow, reach income goals, and grow their business. 

Tools

Dedicated Accounting Software: We'll provide you with third party software, and we can train you to use it. 

Document and Receipt Management: Throw away your receipts (after you send them to us!). We'll provide a system to capture every receipt, invoice, settlement statement, deposit, and cash expense. 

Mobile-friendly: Make executive-level financial decisions from your networking event, coffee meetup, or halfway through your 18 holes. All of our services are made for people who spend as little time in a "real office" as possible. 

Custom Solutions: Our system is built to be flexible. Does your business need something to succeed? If there's an app for it, you can bet that it will integrate with our system. 

Lionshare Bookkeeping takes the stress off of investors, allowing them to go on offense and grow their business or go on vacation and enjoy their financial independence. 

If this is something you're interested in hearing more about, you can email me at [email protected], or visit my website at www.lionsharebookkeeping.com to set up a 15 minute phone call and let's talk!

I think the best system is having a savings account for security deposits, a checking account for all business income, and a business CC for business expenses. If you’re paying or receiving money through a personal account, it can get messy to deal with. Best case scenario is keeping all REI related transactions in their own accounts so that you can track them easily.

Hey Mayer! 

I sent you a PM, I'd love to chat about what you're looking for. I may be able to point you in the right direction. My firm specializes in REI bookkeeping, using a combination of QB, Buildium/Cozy, and bank statement/receipt management. I also do a bit of training and consulting for investors who may not be operating at "full-time" bookkeeper volumes, but still need a little guidance.

@Matthew W. Always, always, always keep records of everything that happens pertaining to your properties. As others have stated, there are hard rules as to when an expense is definitely a Capital Expenditure/Improvement and when it is a repair/maintenance expense. It is also worth mentioning that some of these "hard rules" have exceptions that can fundamentally change your accounting and tax liability. Filing expenses in Capital Expenditures vs. Repairs/Maintenance isn't something that is decided on a whim or with a percentage rule in mind, it's closely monitored. Definitely consult with a real estate savvy bookkeeper or tax accountant. 

While I can't help with the LA accountant search, I do think it's worth talking about Buildium and virtual accountants. 

Buildium sells itself as a property management software, and it does a very good job at the management side of real estate. However, it falls flat when it comes to bookkeeping/accounting. Based on my experience, it doesn't have a good way to handle transactions that aren't property related, it has no Balance Sheet to speak of, and still requires a lot of manual entry. 

Virtual accountants and bookkeepers can help expedite the "manual entry" part of the Buildium "problem," but I think you'll find that most accountants and CPA's are much more familiar with dedicated accounting softwares like Quickbooks or Xero, both of which solve the first two issues with Buildium. Where virtual bookkeepers can fail is in not understanding real estate. Being an investor has a lot of tax issues, organizational complications, and atypical business activities that a standard bookkeeper won't be familiar with. Your best bet is to find a bookkeeper that specializes in real estate investing activities. 

Hope this helps!

@Steve James  excellent question! Based on my experience, you're looking for three different things

1) Dedicated accounting platform: While programs like Buildium say that they have accounting features, these are usually clunky, don't include the balance sheet, and don't include "umbrella" or administrative costs that can't be tied to a specific property. You'll want something like Quickbooks or Xero to be able to automatically collect and handle all of your financial data and run reports. 

2) Receipt management: Especially when dealing with crews of people or multiple jobs at once, it's entirely possible that more than one person is making purchases for your business. The best way to know what these expenses are is to save the receipts/invoices. You'll want a system that automatically syncs these invoices to your accounting software, saving you time and making it easy for your crews to take photos of these receipts instead of stuffing them in their pocket and forgetting about them. 

3) Mind reading: Even with receipts, bank statements, and an accounting software, there's things about your business that only you know. Short of hiring a psychic, there's plenty of information about your business that you'll need to actually tell someone in order to effectively do your bookkeeping. What you'll want in this case is a dedicated bookkeeper that uses their own systems and procedures to collect and save this kind of information, so that they can understand how you and your business operate, all while managing the first two points for you so you can go on vacation and enjoy your portfolio. 

Hope this helps!

Lionshare Bookkeeping offers no-contract, flat rate, monthly bookkeeping specifically tailored to real estate investors. Currently based in Oklahoma, by leveraging awesome 21st century software I can serve anyone in the USA as a virtual, outsourced bookkeeper. Currently looking for a flip, wholesale, rental property, or business structure that is "too complicated" to handle. All previous challengers have been soundly defeated, accounted for, and put to rest on financial statements. 

Services include:

--- subscriptions to the software I use (QBO/Xero, document fetching, etc.)

--- monthly bank account reconciliation

--- document/receipt management

--- classifying and posting transactions to financial statements

--- drafting and delivery of "big 3" statements: P&L, Balance Sheet, SOCF

--- monthly 1 on 1 review of books

My bookkeeping system allows for minimal involvement of my clients. I'm a big fan of strong internal controls and separation of duties, which means I never have your passwords or direct access to your money (not keen on being sued, even with insurance). I do not currently provide tax planning or preparation, but will work with your current tax preparer to make sure you are well taken care of!

Email me at [email protected] or visit my website at www.lionsharebookkeeping.com to set up a free 30 minute strategy meeting. 

@Tom Conant Great question! 

Bookkeepers tend to charge for services in two different ways. 

1) Hourly: usually at or around $20-50 an hour, but this number can vary wildly depending on the level of service you're getting. And I definitely mean level of service. Someone brand new and to bookkeeping may charge very little, and a well seasoned RE CPA may charge the usual CPA rate of $100-400 an hour. 

2) Flat Rate: This charge should stay the same for the most part as time goes on with your bookkeeper. Sometimes it will also include the tools you and the bookkeeper need in order to work together, like Quickbooks. The best part about paying a flat rate is that there's no extra trust needed: the bookkeeper does the work for the price, and you get your books. With hourly pricing, there's always that nagging feeling of "what if my bookkeeper is just letting the clock run? How are they measuring their hours to begin with?"

The best way to get this number is to reach out to a bookkeeper and ask. But, you can always guesstimate by counting your own hours doing it, and then doing the math for hourly.