All Forum Posts by: Cliff Benner

 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. 

Can you do this under an LLC and was there any fees for getting this started?

Any advice on how you went about getting a Business LOC and such a high amount too?

 Try a local Bank around the business, that really helped my friend who bought a business. 

Maybe longer listings for houses. if you are looking at Businesses for sale, lots of the time they might not know they can or understand it. Having a Realtor who knows about creative financing helps too in case they find one or hear about one from somewhere.

I have no experience with this, but just read something that I think is what you are looking for; look into a Performance Deed or Contract.

The 5% is more of an industry rule of thumb, 10% is what I try to do, but I am more conservative and don't take any Distributions or Draws from my Real Estate. It is to prepare you for the inevitable and create a Defensive position.

It is calculated using Rent.

Example: $1,000/month rent - set aside $50/month for CAPEX, $50/Maintenance & Repairs, and $50 for Vacancy. Then you are "allowed" to spend the remaining $850 on mortgage and other items.

For my Bookkeeping Clients, I suggest to them to use a Savings account for these items to add interest income to their account until they need it.

I would recommend QuickBooks Online. 

It is what I have my clients use, because you need to separate out your finances for each property at Tax Time. 

There are several integrations that you can connect to QBO from Airbnb and other websites to get all your information synced over for each transaction and you can get AP Softwares that help with paying bills for you too.