All Forum Posts by: Kristen Ambrose

Congrats on purchasing your first property!

I agree with everyone above, you can definitely do the bookkeeping yourself at this point within excel. As long as you keep everything in a separate bank and credit card account, it should be fairly straightforward to track. You can find some good YouTube videos on the types of income and expense categories to use. 

I would hire a CPA to do your taxes as they'll make sure you are filing properly and in a way that's most advantageous for your situation.  

Quote from @Amber C.:

@Kristen Ambrose I think I got it. So bank transfers (draws for the loan) will not be recorded to the WIP account. Only the expenses for the rehab which I am already currently doing?

Yes, that's right. For example, if the lender transferred you $9,750 because the draw was $10,000 and the draw fee was $250, the entry is as follows:

DR. Cash $9,750
DR. WIP $250
CR. Construction Loan $10,000

Agree with Simon and Charles. One thing to consider, if there's a draw fee, that will be booked to the WIP account. 

You can also have multiple WIP accounts for flips if that helps with your tracking. For example:

Flips - Purchase Price

Flips - Acquisition Costs

Flips - Rehab Costs

Flips - Holding Costs

Flips - Selling Costs

Congrats on the triplex purchase! It's definitely a good idea to get in the habit of tracking expenses related to that property separately. I prefer using Quickbooks to do this. This will be really helpful come tax time especially if you have other properties or plan to buy more. 

My property management clients like both Appfolio and Rentmanager. 

I've found the accounting and personal finance courses I took in college to be the most helpful in growing our real estate investing business. 

Quote from @Kenneth Jenkins:

Great overview.  Thanks, we have multiple entities and QBO has turned very costly as a result.  I will definitely be checking out REIHub.

Where are your properties in Detroit?

 Hi Kenneth, 

Just wanted to note here that it is possible to have multiple entities within one QBO subscription as long as they have similar business purpose (real estate investing). In order to do this, you need to have the Plus subscription and use the Business field for entities and the Class field for properties. 

I typically book cashback credit card rewards as a DR. to Cash and a CR. to Other Income. The Other Income line should be below your Net Operating Income on your P&L and flagged as credit card rewards so it isn't taken into consideration for taxes. 

Hi @George Omae,

Seems like you have a lot of great bookkeeping options here, but I'd also invite you to check out my page. 

We specialize in bookkeeping for REIs and can make sure both your ST and LT rentals are accounted for accurately. We'll provide you with monthly reporting so you know exactly where the business stands and year end will be a breeze. 

I use QuickBooks Online for all of my real estate investor clients. They find the reporting useful month to month to see how their properties are performing but also everything is done come tax time.

 Income Digs has great YouTube videos on how to tailor QBO for real estate investors if you're looking for a DIY approach or some education on it.