All Forum Posts by: Brett Sayers

@Steve Morris thanks for the reply. I’m getting ready to set down with a QB pro advisor /CPA to get it all worked out. Just trying to expedite the process actually engaged with them as they bill out at $160/hr. I’ve got a handle on most stuff, just need to tweak my mindset a little.

@Bradley Niemiec thanks for the detail in the reply. I really appreciate that.

So I track the properties by class and there’s no need right now to have sub accounts (yet).

In regards to your reply, I think the net effect will still be the same on the balance sheet. If I transfer from a bank to other liabilities in the COA, the amount “owed” as a liability decreases. Similar to making a payment to a credit card. I am not sure if the journal entry will work the way you are suggesting.

I did consider having the beginning balance for the liability account be negative so that every transfer of money in will cause the numbers to match reality of the balance in the actual bank, just with a negative. This will still skew the balance sheet though as the liability decreases.

I’m still digging though. Head banging will continue until I get it right. All input is appreciated.

@Soh Tanaka are you saying to have a savings account in banking and the same account listed in other current liabilities? Can you have both? Please give more details.

So I found if you bang your head against the wall enough, eventually you get to the "Help" Icon and type in the question you want to have answered. 

Question 2. Answered: I found out that in the Registers for each account there are check boxes that have 3 different values.
a. An empty box which means this transaction has not cleared your bank account
b. A BOLD check mark (the first icon that appears when you click the empty box). This means the transaction has cleared your bank AND you have reconciled it with your bank statement. This transaction will not show on the reconciliation screen when you click "Banking --> Reconcile"
c. A NOT SO BOLD  check mark (the icon that appears when you click the empty box 2 times). This means that the transaction has cleared your bank BUT you HAVE NOT yet reconciled the transaction with your bank statement. Therefore it WILL show up when you click "Banking --> Reconcile".

Question 1:  Still remains a mystery to me as of yet. Maybe the wall I am banging my head against will impart some knowledge about accounting and Quickbooks before long... 

WE SHALL SEE 

Great Job Jonathan. I'm out in Clarksville with some single family houses. I'm interested in finding out what your deal looks like. Is it a Duplex, Triplex, Quad? What part of town? All the details . . . What an amazing town. I know some great folks out there in Clarksville so let me know if you need anything.

I have no idea how this landed in my lap.. . .

Sometime in June while I was painting my current HouseHack getting it ready for a tenant to move in, my contractor called me talking about a deal he ran into that he wanted to flip but didn't have funds for. I offered to finance the deal as a private lender, but they wanted to go it alone.

Fast forward to August this year and the contractor calls me back asking if I still wanted the deal. I dropped my plans that day and headed out there. It was not in the best shape and the owner was the contractors buddy trying to unload and avoid 2 mortgage payments. They had a handshake deal to buy the property for $52,000 for the 3/1.5 1142 sqft ranch on more than 1/2 acre with a fenced in yard. I immediately got my agent to draft a contract with me paying all closing costs etc. We closed a week later and I paid the contractor $1,000 for bringing an awesome deal. He also got all the work.

I had a bonus structure set up with the contractor. He said it would take 2-3 months tops to replace all the subfloor, paint, remodel both baths, put in new fixtures and re-side the house among other things. We agreed if it took him 7 weeks to finish I would tack on an additional 10% to the labor cost, 9 weeks would be 5%, and if it went past the 3 months he said, a 5% penalty per week. The house was completed in just over 7 weeks (he got the full 10%), with a total cost of $54,000 with materials, labor, and other holding costs. All in around $108,000.

The property appraised at $130,900 and the local bank is lending 75% LTV ($98,075). I'm in to the house out of pocket at about $10,000 with an additional $20,000 added to my net worth.

I listed the house on cozy.co and a local Facebook group two weeks prior to finishing the rehab. I scheduled an open house and had 4 prospects show up. The only one to fill out an application wanted to move in almost immediately, and put down a double security deposit due to credit issues. At the open house, he saw my "I Buy Houses" sign in the yard and mentioned that he had his home burn down last November. He asked if I wanted to buy and I said HELL YEAH. He has moved into the house at $1150/mo rent for the month of November and we are scheduled to close November 30th on the lot with a slab and driveway (cleared other than that) on 0.16 acres.

At the closing table, I will buy the lot for $15,000. It is written into the agreement that the seller will pay at closing 1 year rent up front for the house I just had rehabbed. That's $13,800 (less November rent already paid). He gets a place to stay for a year, I get a vacant lot to build on, and guaranteed rent literally IN THE BANK!

I've had an offer already for $5,000 over my purchase price at a simultaneous closing as well. I am not sure if I will build or sell yet, but....... this is like Monopoly for real!!! Buy Rehab Rent Refinance Buy from the tenant for the Repeat. Maybe Brandon Turner can coin a phrase for it and write a book. 

Hello all. 

I'm not sure if I am doing this right or not. I purchased QB Desktop last month to convert my 6 spreadsheet rental property tracking system to one program. I have never used any accounting software before and it is safe to say that the learning curve is pretty steep. I have spent many hours setting up a Chart of Accounts, watching tutorials, coding accounts, trying to get transactions entered to show up elsewhere without messing up some other account, and a host of other banging my head against the wall activities.

I have found that Intuit is not the most. . . hmmmm . . ."available" in their customer support. The Quickbooks community posts also seem to thread into the author using symbols and all caps to convey their frustration at the Quickbooks support "answers" not really saying anything of substance. With that said, I was hoping perhaps someone on this forum has been through what I am trying to do and could tell me what I am missing.

1. Tenant Security Deposits: From everything I have seen online, tenant security deposits show on your balance sheet as an "Other Current Liability". I have one savings account for all of my security deposits and have set it up in the COA under Other Current Liabilities. Now, when I get a SD from a tenant it is put into my working checking account and then transferred to the SD Savings. The issue I am running into with the transactions in QB is in order to deduct an amount from my checking and transfer it to my Liabilities on the COA, the checking register has to show a "payment". . . But. . . If it is listed as a payment and directed to a Liability account, the liability balance goes down (ie I have $5,000 in the SD Savings and transfer $1,000 into it, when the transaction is made the $1,000 is deducted from checking but the SD Savings balance reflects $4,000 now instead of $6,000). I cannot get both of the accounts to match reality at the same time. I am looking at the following two options:

a. Listing the SD Savings as a bank on the COA and to hell with a couple grand being off of my balance sheet as a liability
b. Praying someone reads this post and says. . . "Brett, you dummy. All you have to do is this one little thing in the journal entry to fix all this mess you are creating for yourself."

2. Reconciliation of Registers to Bank Statements: Originally I had started putting in my accounts and listing the "Opening Balance" at the date of the last statement for each individual account. That's all great IF all of the banks put out statements on the very same day of the month. In my case they do not. The business credit card comes out on the 18th, some accounts are on the 1st, others the 29th, and so on. This created a huge mess when I tried to get all of the registers to line up because one transaction effected an account that started after the post date of the original transaction. I finally scrubbed it all and decided 10/18/2020 was the opening date for all accounts as it matched the business credit card statement date. Now, all of the account balances match the online balances for the associated dates for each transaction. I am running into an issue when it comes to Reconciliation of the registers to the bank statements though. The process leaves me with a "Cleared vs Beginning / Ending Balance Difference" of some amount. If I click reconcile against the warning QB throws up, an automatic Journal Entry is made balancing the account which changes the balance shown on the Register for that Account. If I delete the Journal Entry, the Register Balance becomes correct, but the Reconciled Balance is off again. (Catch 22?). Again I am looking at 2 options:

a. Never using the Reconcile feature on QB and keep up with the balances on my own OR

b. Praying someone reads this post and says. . . "Brett, you dummy. All you have to do is this one little thing in the journal entry to fix all this mess you are creating for yourself."

At the risk of asking too many questions and soliciting advice from people that I should be paying professionals to help me with, I will stop the post here. I will be going to my CPA to set up the Basis, and accounts for each property, but they charge from $65-$260/hr and I am trying to minimize costs as much as possible. At least if I go in with some solid notes and record the entire conversation my money to get this set up will be well worth it. Any help would be appreciated and feel free to message me if you want more details about the issues I am facing.

Thanks In Advance.

@Todd Rasmussen don’t forget Trane, Vulcan Materials, and the new event center.

@Kevin Wilson it’s good but competitive. The prices are getting driven up pretty high even with wholesalers. It’s been doing well for price to rent ratios though. With Ft Campbell right there there’s a strong tenant pool with guaranteed income. Most of the investors I’ve met out here are helpful too.

@Jason Young it is possible to overextend. Putting an 8-10% interest rate on a project is really unnerving. Mainly the LOC is used for quickly securing the property (especially if it is way under market).

You just have to start talking to investors in your market to see what bank they use. Talk to a lot of banks as well. You don’t know what they will give you unless you ask. I applied for several credit lines only to get 2 so far.

In the end you really have to be a careful steward of the money you invest whether it’s yours or your banks. There is risk, but also reward. And you won’t catch any fish unless you put the worm out. That’s why at the end of each podcast they ask “what sets successful investors apart from those who give up, fail, or never get started” as part of the famous four.