All Forum Posts by: Kelly Cruz

@Daniel Reyes I'll probably continue to use Excel to keep track of anything I wouldn't be able to do in Quickbooks. Regarding our partnership agreement, we're set up as an LLC and have everything laid out in our operating agreement.

@Simon W.  Thanks for the advice! I’ll keep that in mind.

Thanks for everyone's input! Not that it makes a difference, but each of the three members of the LLC are family members and each is listed as a managing member.

At tax time, our CPA files a tax return for the LLC with a Form 1065 and each member receives a Schedule K-1 which is then filed with our personal tax return.

The reason each property may have a different profit split is because there may be investments and draws by an individual member, therefore changing each equity position.

For general expenses not tied to a specific property, those are split equally between the three of us. As for profit on the sale, that is split according to our equity position at time of purchasing a particular property.

I’m super organized with all our numbers using Excel and submit all the breakdowns to the CPA. Since keeping track of everything in Excel is not ideal, I’m now setting up QuickBooks to simplify my bookkeeping.

How we have this setup seems simple and straightforward to me having no accounting or law background. But now after reading these posts, I’m wondering if this setup breaks accounting and tax laws? 

@Simon W. we're strictly flipping under this LLC, and have been doing so for several years with multiple flips per year. The majority of properties are owned for less than six months.

@Caleb Heimsoth why is it an accounting nightmare? How would you suggest I set it up instead. Any advice would be helpful, thanks.

Thanks @Daniel Reyes and @Mary M. for the helpful info. It seems that as long as I keep QuickBooks updated, I should be able to figure out equity position pretty easily and keep track of it in Excel.

After a property is sold, what are the steps to record profit to each partner? I’m not sure how to show the profit split and record this transaction.

Also would it make sense to organize each partners equity account in the Chart of Accounts in the following matter? I’ve only seen examples showing partners Capital Investments & Draws, but not Profit/Income. Would this setup be helpful in keeping track of each partners profit?

Member Equity
          Partner 1 Equity
                   Partner 1 Investments
                   Partner 1 Draws
                   Partner 1 Profit

          Partner 2 Equity
                   Partner 2 Investments
                   Partner 2 Draws
                   Partner 2 Profit

          Partner 3 Equity
                   Partner 3 Investments
                   Partner 3 Draws
                   Partner 3 Profit

I’m new to QB and don’t have an accounting background, so not sure if any of these ideas make sense for what I’m looking for. Anyone's input would be helpful, thanks!

Hello – I’m getting started with QuickBooks Pro. Many of my questions I find answered online, but there are some  I can’t find answered anywhere. I'd like to open a discussion about some of the questions I have and hopefully the answers would be helpful to others that come across this post.

Current issue I'm dealing with: There are three partners in our LLC. The profits are based upon each of our equity position at time of purchase. That can change per property depending on capital investment and draws by each partner. How do I show each partners equity position at any moment in time?

Also after I have entered a property sale into QB, what is the best way to record each partners profit for the sale?

Any input would be helpful…thank you!

I'd like some clarification regarding how a real estate investor would list flips in the Chart of Accounts. Would it be "Other Current Asset" or "Fixed Asset"?  From what I've read elsewhere, my understanding is that flips are listed as Other Current Assets.  

I'm now getting started with setting up QuickBooks Pro. I know there are a lot of books and videos out there. I'm looking for any recommendations on books/video training specifically for setting up the program for a rehab/flip business. We're a three member LLC. Any recommendations for learning the software would be greatly appreciated.

@Account Closed: Thanks so much for replying to my post and for the helpful advice!

Hello, I’m new to this site and have a question I haven’t exactly seen answered in my search. I’m looking to start using QuickBooks Pro or Premier. From reading these posts, I realize the online version is not as customizable, so I’m not going with that. In deciding between Pro vs Premier, I just need help deciding between the two depending on my needs. Hopefully this can help others in my situations as well.

I do real estate flips. I also have two other partners (family members). The money we use for flips is held in a joint savings & checking account. When we purchase a property, our equity position in the property is equal to our equity in the bank account at time of purchase. Each property can be different, depending on if a member puts money into the account or drew money.

We’re purely using this money for flips. Properties are held for 3 to 6 months on average. We’ve done four this year and hoping to do more. We’ve done many more flips in previous years and I’ve been keeping track of everything in Excel, but I’m looking for a more efficient way at handling our accounts.

In the future, we may add more partners as well. Either them adding money to our account or sharing title as a separate entity.

Any help or advice you can offer regarding Pro vs Premier (or another software?) would be greatly appreciated. I’ve been thinking of switching over to QuickBooks for years, but just didn’t know where to start. I’m finally going to make it happen! Thanks again for any of your advice!