All Forum Posts by: Or Y.

@Soh Tanaka is there a specific benefit of having a tenant as "job" rather than a sub-customer? Thanks for pointing that out to me.

@Basit Siddiqi I'm using QB Online (Plus version), I wasn't able to figure out how exactly to define the mortgage, and due to the fact I've refi'ed a couple of them it sounds too complex to create... I thought of just classifying them all as mortgage payments (creating a new type of account), and then at EOY to take the mortgages' statements and retrieve the amount of interest paid, along with prop taxes and insurance paid from escrow accounts.

Is there a better way of doing it? I'm not sure what is the correct approach that will be both accurate and also simple enough to setup. I'm usually good with numbers but this thing is rather awkward for me to set-up... Thanks for all the help!

Thanks for your reply, I'm using different accounts per business and do not commingle the funds.

I think that leveraging the class/location feature in Quickbooks can be good enough to differentiate the accounting aspect of the three.

Currently, I decided to setup the properties as customers, and the tenants as sub-customers of their respected property(=parent customer). Not sure I even need the granularity of the tenant information since I don't bill them using Quickbooks though...

Howdy,

I've searched both here, on google and youtube - but I'm seeing so many different takes and just getting more and more confused. This website and the users here are often the best resource in the industry so I figured I should ask (and if you have a link to a recent thread here that already covered the topic - please share).

Long story short: I'm tired of trying (and failing) to control my accounting using google spreadsheets, I tried using Stessa last year but they were not reliable, and with my recent TX real estate license I figured I should just get my entire accounting in order and use a proper tool. Everyone were recommending Quickbooks Plus so I opened an account.

From past experience, I know that it's better to set it up properly from the get-go instead of doing OJT, hence this thread.

Generally speaking: my household got multiple businesses - I got a real estate transactions income, the wife got interior design income, and both of us got rental properties. I'm planning to differentiate between the three using the locations feature on QB.

I think I got a good grasp of how to manage our businesses, but the rentals are giving me a harder time. 

My current plan is to define a class per rental property, and assign my tenants as customers (when they pay rent). But I'm not sure how to go about creating a proper Chart of Accounts.

I'd like to have IRS Schedule E form as the type of expenses, but I'm not sure what is the Account Type and the Detail Type I should utilize.

And generally speaking, I'd love to learn from those who use this tool - how do you use it? Any best-practices I should get familiar with?

Thanks,
Or

I have both. I found that for my strategy, SFR fit better.

If you're visiting Austin feel free to DM me, I can show you around / share my experience etc.

Good luck!

Hi @Amy Berman,

After additional deliberation and research, I've decided to hold off on San Antonio for the time being and focus on my local market - Austin, TX.

I own multiple properties in this area, and so far I'm happy with my investments. Austin is more pricey than SA, but it got its own benefits (from my personal perspective).

Sounds great, see you there!

I'm interested as well. I've purchased several properties in that area in the last months and I'd love to meet more people that share the same enthusiastic approach towards RE.

Hello,

I've recently moved from CA to TX, been investing mainly in Austin - but would like to get into the SA scene.

If anyone is willing to share information and develop a network - please PM me. Would be very happy to share my inputs on Austin, too.

Cheers

Thanks again for your inputs, I've learned a bunch of thing.

I'm going to stick to the 30y, and perhaps 'tinker' with the payment schedule to expedite equity gains (and interest payment reduction).

@Clayton Mobley

@Clayton Mobley regarding your comment regarding reserve - you are 100% correct, of course. The way I operate with my household (and future rentals) is using multiple "micro savings" (--> MS), each with its own designation (e.g. yearly expenses / vacation expenses / general savings etc). Each MS got a monthly deposit, and withdraws got to stay inside the MS's boundaries - this way even if I have $10K "laying around" in my savings account, it doesn't mean I can "afford" going to a $10K vacation - it depends on how these $10K are spread across the MSs.

So same goes with rentals - the rent comes in, but some of it will go into the "vacancy MS", some into the "maintenance MS", some into the "cap MS" and so on and so forth.

My current couple of investments are not $flow+, they're a "break-even" properties that bank on appreciation. But I'm planning to diversify the portfolio towards $flow+ in the near future, since appreciation is just another type of gamble (calculated risk, but still).

Thank you for your inputs!

Some updates after checking options with lender - it turns out that mortgages with high down payment are "frowned upon" (from financial perspective), so the bottom line was that a 15y+50%dp get about the same interest as 30y+25%dp(!)

This was super surprising to me, since the loan is way more "secure" for the lender AFAIK.

@Clayton Mobley the problem with 15y+25%dp in my region, is that you will have negative cash flow. I can stand the neg flow by using the additional reserved 25% I didn't put down, but I assume that lenders will not allow too much loans when they see that bad $flow.

@John Koster I like this approach, 30y+25%dp+expedited payments using 25% reserve. What I fail to understand is:
A. how often can you make these payments?
B. what happens when you inject more funds into the principal: does the end date of the loan reduced, or does the monthly payment go down?

On that note I wonder - what happens if someone takes 30y+25%dp, and then a month later pays 25% of principal? (same question of B., except instead of enlarging the monthly payment using these extra 25% you didn't put as dp, you do it once)