All Forum Posts by: Dan V.

Net income will roll into the balance sheet as Retained Earnings. Normally, the net income are allocated to each partner in the tax return but not adjusted in the books, so it sits in the Retained Earnings Account. If adjusted in the books, normally it goes rolled into the Owners equity account.

Any income/expenses not specifically associated to a specific property should have a separate class (you may call it general & admin class). 

@Michael Bennett Quickbooks should have enough feature for your flipping business, whether single or multiple investments. You can set up budgets to compare with your actual and there are good reports you can generate to help you analyze your performance. With proper set up of books and accounting procedure, you should be able to extract the information you need. Search online for ideas on how to best setup books and process for flipping business or you can ask a professional for guidance. Good luck!

@Kabura Onesime There's one tonight. They do meetups every month. 

https://www.biggerpockets.com/forums/521/topics/640392-hampton-roads-investor-meetup-and-networking-in-virginia-beach

@Libby Baugher Setup the properties as class and customer, for duplex you can set up each unit as sub-class and sub-customer. Treat the PM statement as a bank statement, which means, you will set up the PM in the chart of account as a bank account, track all the PM transactions to that account, then reconcile it monthly. If you are all about the details, then you can enter each transaction in the PM statement just as you would do for a bank statement. Also note that there might be other business transactions not processed by your PM so make sure you capture those as well (ie. mortgage interest, insurance, admin expenses, etc.).

If you are planning to outsource or hire an online accountant, QB Online is a great option. Also, make sure that your accountant/bookkeeper has real estate background as there are accounting rules to follow, specific to the industry. Good luck!

@Mohammad (Asad) Asaduddin Your 2018 copy should be fine. I think they stopped supporting 2014 and older, it's still going to work but some features like online banking will not.

@Ben Wagner You are on the right track by tracking each property using Class, and tracking construction under WIP and then moving WIP to COGS once sold. And yes, you can create similar sub-account under COGS like you have them in WIP. Here's an example of P&L report with %.

I have not tried using items but I think doing that will make the process more complicated, rather than just entering it at the register.  

You can use the budget feature in Quickbooks but that is limited to P&L account not balance sheet. You can see your performance by running actual vs budget P&L for the items you already sold, for the ongoing projects, you can export the progress and put it in excel to compare it with your estimate. Or you can do what J Scott's doing, charge everything to COGS then move it to WIP comes reporting time. 

Here's an example of custom report to see your progress on ongoing projects. 

Good luck!

Breaking News: Amazon Announces New York and Virginia as HQ2 Picks

"Amazon laid out its plans for two of the biggest economic development projects in the country on Tuesday, announcing that it will put major corporate outposts in New York City and Arlington, Va.

The two locations, in Long Island City in Queens and Crystal City in Arlington, just outside of Washington, will eventually house a total of more than 50,000 employees, the company said in a statement. It also said the new sites would require $5 billion in construction and other investments." - The New York Times

Congratulations to those who have properties around these 2 areas. 

There's no class tracking in Wave. The workaround I can quickly think of if you still prefer to use Wave is to do vertical tracking, meaning you create sub-account for each account to distinguish the transactions for the property. If you are using invoice/sales receipt you can map the product specific to a property to an income account created for that property. See sample below:

Rental Income

    Property 1 Rental Income 

    Property 2 Rental Income

Repair & Maintenance

   Property 1 R&M

  Property 2 R&M

However, this workaround will require more time especially in analyzing your business. If using free software will cause you to spend more time on what you should be doing, then you should also consider the value of time loss, maybe it will justify the cost of using another program. 

@Ayne C. You will need QBO Plus in order to track activities by unit which is right now $60/month. Don't be discouraged by the cost since as others mentioned, you will save CPA costs if your books and accounting process are set up properly and efficiently. Aside from cutting the number of hours your CPA might spend on your books, having online version will give you more flexibility on the CPA you can use. You can scout around more reasonably priced accountant here in BP or online. As Carl said, if you don't think it's worth it, you can cancel anytime. 

@Randall Degges Congratulation on your first rental property! To answer some of your questions:

- Quickbooks is pretty popular here, and if set up right, it should be able to give you decent reports to view the financial performance and health of your business. You can go offline version if you prefer to do it yourself and cheaper, or online version if you wanted to hire remote accountant (more options), more convenient but costs more. 

- Yes, you can claim expenses even though the properties are in your name. You will be reporting income so you are entitled to expenses. The tricky part is to determine what can or cannot be expensed, and the timing of recognition, so it is advisable to talk to CPA/accountant familiar with the industry.

- If you are not familiar with bookkeeping, I would suggest you hire an accountant/bookkeeper who specializes in REI (don't go cheap). Property managers will only account for the operation side of the business, so in order to track everything, you will need to have your own sets of books. Few examples not usually tracked by PM are mortgage payments, taxes & insurance, admin expenses, depreciation and any other expenses paid directly by you.

Segregation of funds is also very important, so setting up a separate account for the business is a must. Do not comingle funds (personal & business), otherwise, it will cause you a headache and more money.  Good luck!