All Forum Posts by: Erik Trefzger

@Nathan Emmert Thanks so much for posting that.  I'm trying to figure out what to use for my cloud based bookkeeping and this post was very helpful.  I think I have it narrowed down to Wave or Xero.  Are you still liking Wave after a few months of using it?  Any suggestions for me before I set everything up?

@Steven Hamilton II why do you say that?  I'm in a similar situation as @Curt Smith and I'm also trying to find a good cloud based bookkeeping solution.

I ruled out Buildium b/c I use a property management company that handles all of the tenant management, rent collection, etc part of my business.  I also use an accountant to do my taxes.  I don't need an all in one solution, just a bookkeeping solution that allows me to see how my individual properties are performing and as a way to get my accountant the numbers he needs at the end of the year.  Any guidance is appreciated!

@Jonathan Key I can't believe this isn't being asked way more often!  There's gotta be a simple way to do bookkeeping for those of us who use property managers and accountants.  

I was also thinking of trying out Intuit's Property Management software, but then I saw the reviews on Amazon and decided to stay far away.

@Gita Faust 

I guess I am willing to do double entry accounting, it was mostly just QuickBooks that I didn't like.  

- As far as software costs go, I don't mind recurring or one time fee options.

- I have a property management company take care of that side of the business and an accountant that does my taxes, I just need a real estate focused bookkeeping solution.

- This is probably true, but I put time into learning QB and still didn't find it intuitive.  There are lots of real estate specific "problems" with bookkeeping that were not easy to solve.  

- I want to know how to use the software so even after I hand off the bookkeeping, I can go into the software and run reports, dig into the data, etc.

I've been trying to figure out a bookkeeping solution for years now, and I just can't seem to find one.  I own 5 properties (8 units), but would like a system that could easily scale up when we purchase more properties.  I have two property managers (one locally, one out of state), so I don't need an all-in-one system that tracks vacancies etc.  I just want a simple bookkeeping solution that is easy to use and can be real estate specific.

What I've tried in the past: Excel was fine for the first few properties, but then it got too cumbersome and I'd like a more elegant solution.  I then tried QuickBooks and just hated it.  I don't want to do double-entry accounting, and it was annoying setting it up with classes, jobs, etc to try to get it to fit real estate.  I then tried a local bookkeeper but she was quite expensive and it still required me to do a lot of work myself.  The following year I outsourced the bookkeeping to someone in New Jersey for only $100/month, but the results were very poor; he just lumped everything together and didn't even separate the properties income/expenses/etc.  It also seemed like I was still doing too much work.  

One thing I learned from trying to outsource my bookkeeping is that I have to understand how to do it before I try to hand it off to someone else.  I want to hand the books off after I find a solution and can do it myself (since bookkeeping is my least favorite part of this business), but there has to be a simple system for someone like me.  

So here's my wishlist, does anyone know if anything out there comes close?

- Cloud based (ideal but not necessary)

- Easy to use

- Separate expense/income tracking for individual properties

- Generate reports for all properties as well as individual properties 

- Import from bank accounts, although I would need to manually separate those transactions.  For example, I get paid a couple of lump sums from my property managers every month, and one $5000 payment might represent 4 rent payments and 9 different expenses

- Separate mortgage payments into principal/interest/escrow transactions

- Track escrow payments from mortgage companies and escrow balance (ideal but not necessary)

I'm looking at freshbooks, Xero, and Wave, but if anyone has experience with this let me know!  I don't need an all-in-one solution, just a way to track what my property manager sends me!

I signed up for bench.co because bookkeeping is the least favorite part of this business, and I have yet to find a solution. They seem like a great company, but when they called me to get information about my LLC, they told me that they don't offer bookkeeping services for Real Estate Investment Companies.

Good luck with your search and let me know if you find anything else out there-- I have tried two different remote bookkeepers and ended up with a big mess, and I have no desire to waste anymore of my life looking at QuickBooks.  It's tough b/c I have a property management company collecting all of the rent checks and sending me monthly statements, so I don't need invoicing etc like many online bookkeeping services offer.  I just need basic bookkeeping that can look through a statement and categorize all of the real estate specific transactions (for example, split up my mortgage payment into P, I & Escrow, and also track when the bank pays taxes or insurance out of my escrow account).

Hi @Tiffany Plovie , please add me to the list as well.

Thanks!

Erik

@Account Closed

Grant, I agree with half of what you are saying, but strongly disagree with the other half. Spenser, yes you do have to "ignore the naysayers" at some point and jump in and get your first deal, even if it doesn't have impeccable numbers. On the other hand, ignoring the naysayers (those who say that every less-than-perfect deal is bad) is very different than listening to good, solid advice from people who already have experience. It sounds like you are already on that track however, since you did not buy that duplex that you originally posted about.

My only point is that while it is tough to find a perfect deal without any experience, you should definitely avoid potential problem properties, and that duplex is probably one of those properties.

It shouldn't take much digging at all to find SFRs with way better numbers, and it sounds like that is what you are doing.

@Account Closed I also bought a duplex foreclosure a few blocks from you a couple of years ago in the Hilltop area-- on 8th St S. I spent about $20k fixing it up and making it presentable, but my biggest problem with that property is the vacancy rate. I've had some great tenants move in, but they don't like to stay because the neighbors on both sides are extremely slovenly. I think the tenants in the duplex to the left of mine are hoarders, and the tenants on both sides hang out on their porch all day smoking cigarettes and scowling at people who walk by. Right now I've had one unit open for many months, have gotten dozens of prospective tenants through the place b/c it is a clean, nice unit and it shows well, but unfortunately those neighbors keep anyone good from moving in.

I get $1350/month in gross rents when both units are filled ($600 + 750), but half that when there is a vacancy (I would bet that the duplexes next door probably rent out for $400/unit given their condition). I also pay about $200/month in WSG for the duplex. All in all, my SFRs in Tacoma cashflow better than my small MFs after I account for vacancies and utilities. That said, it still breaks even after all these issues, so if Hilltop ever gets cleaned up I think it'll be a good investment. It's not bad enough that I will sell it, but it's not good enough for me to make additional MF investments on Hilltop either.

Hope this helps Matt, and I wish you the best of luck. Hopefully Hilltop cleans up sooner rather than later for both of our sakes, but it has been a work in progress for the past couple decades.

Just noticed this thread now, but thought I'd add my two cents. I assume that you didn't buy that duplex which is good- numbers were way too low for Tacoma. I own a duplex in Tacoma that gets $1350/mo but I've found my Tacoma SFRs that rent for $1100 do better because I don't have to pay utilities and have had way lower vacancies. I'd recommend sticking to SFRs unless you find a duplex with numbers twice as good as you found. Good luck.