All Forum Posts by: Cliff Benner

I think of cashflow in more of the accounting sense, so Cash in vs Cash out, Cash flow is whatever is after that. We leave everything in the business for Real Estate so $500/month is a good number for us, then we can add to our reserves, plan a fix, or save for the down payment on the next one. 

Hi @Adam Hoeker

I have my clients all on QuickBooks Online.

We sync in their accounts to reduce human error in entries, and track each property's expenses and transactions to prepare for Tax time, this helps us to be prepared for 1099s as well, track Asset Basis and Depreciation, Mortgage Balances, and any Equity items.

Since QBO is very common, it is easy to connect a Tax Accountant to this as well and have them pop in to grab reports they need to file. 

I would be happy to hop on a call and discuss more, I like seeing that you are being proactive about it so that way you can get a Good foundation set up, as you grow!

I strongly recommend doing something with getting Books in order for Tax season, this gives people 3 months to get an idea of what they can do to make it easier on them and possibly cheaper. 
I try and push my clients a bit more on year end items from October on so January isn't a Poop show for all parties. 

Most PMs offer "bookkeeping services" as a statement showing all the transactions per property they are managing. These transactions don't included additional expenses the business incurs like meals, travel, dues, subscriptions, marketing, accounting, licenses, phone, internet, etc. I would be skeptical of one who offers all because they would then control how your income and expenses are being coded and they could be doing something nefarious. 

I recommend hiring a Bookkeeper who is Independent of the PM and knows what they are doing because if they PM is doing weird things they can catch it and have no care if you fire that PM. 

I would be more than happy to discuss Bookkeeping services with you, if that is what you are looking for? Send me a message and we can get something on the calendar.

I feel for a mortgage it is better to pay the minimums, as long as that interest rate is low. I would pay off everything else first; credit cards, car loan, personal loan, college loans. 

There are so many things that you could put extra money towards that will compound more now and grow into something bigger than paying off your mortgage early. I would say what you are doing now with the investment fund is great, then find a real estate deal or a business to use that amount in the fund to purchase and repeat, and/or max your HSA out first.

I used a Job Recruiter who knew my work was looking for an Accountant. I work at a Warehouse Developer that builds from ground up, then rents them out and manages everything so I get to see a lot of sides of Real Estate. 

The recruiter was free for me. 

I also do Bookkeeping as one of my businesses and have lots of Real Estate clients where I get to learn different things about their business and talk with them. 

could you do a lease option to purchase it and do all the work, then "refinance" it with the purchase in a few years? This is what I was thinking about doing to use little upfront as a down payment. 

 That is a great point as well, I have noticed there are a lot of Accountants/Bookkeepers out there that have no idea what they are doing with Real Estate and they think it is like other types of business, they charge based off those businesses and find out they have to do more work and Real Estate needs more details and separate reporting and they do the bare minimum which ends with an investor having to pay someone like me to clean up everything and get them back on track. I have seen some of these "Bookkeepers" who have a set price and then get VAs to do a lot of the work and they send pretty Excel financials over to make it look like they are great but they don't actually know the concepts and how it all flows together. Those type of bookkeepers are the reason i will always be able to make revenue. 

Glad you found someone Jon, I really hate seeing Business Owners struggle or go under because of low quality Bookkeepers that don't make accurate financials for the Owners to make better decisions. 

 @Daniel M.

In your Bank Account you will just see the Net Rent come through. For you to have the most detail and proper reporting, you would want to split that transaction up and have a line for Gross Rent, PM Fee, and Categorize the Misc. Exp. that best you can. 

This will also help when you file 1099s to report the proper amount to the IRS and send a correct 1099 to the PM for their PM Fees and possibly any Advertising or Repairs they may have done

For the mortgage you will split it like you have it except the Mortgage will split to include the Principal amount to the Liability and the Interest expense. 

I charge around $70/hour, I set my clients up on a flat amount per month though. So I take what you have and what you expect, estimate the time it would take in a whole year of work and create my flat rate.

I notice short term rentals are about 1 hour a month of work per property, since we need to track each property's Profit & Loss for Tax time, this is also tracking a mortgage and depreciation as well for that property. LTR are about 40minutes a month each for the same tracking. 

Fix and Flips are different, you are running more of a product based business and needs to be tracked a different way, that one is more of 2 hours a month/flip to make sure we are classifying it correctly and tracking it as a project. 

Abel is correct that you will pay about $65/month for the software as well, assuming you have more than one property. With just a quick estimation Jon K's bookkeeping is under what I would estimate with only the info he gave me, seeing a bank statement and asking more questions would give me a better idea. 

I am more than happy to hop on a call with you and see how I could help and give any opinions.