All Forum Posts by: Sanjay Gupta

Is it legal for hard money lender to charge interest on full rehab amount even though full rehab amount was not given. We have 90K rehab money which was funded by Hard Money Lender, however due to stricter guidelines we end of using lots of our money to fund rehab. Out of 90K, only 60K was given ( in about 3 installments and based on work completed) and 30K is still remaining and we have finished project. When I asked Lender they said yes they charge interest on full rehab amount even though we have used only 60K out of 90K so my question is, is it legal to charge interest even full rehab money is not advanced.

0 Votes

Thanks Franks,

I have created Sales for Property account and recorded like as you said.

How do I offset entries in Fixed Assets ?
Do I need to offset entries for rehab & interest expenses entries also ?

My goal is to see P/L for each property ( including cost of acquisition , expenses and selling price etc)

Originally posted by @Frank Chin:

Sanjay, I don't use GnuCash, and I don't know your total setup, simply put you did not mention any sales or income account in your post. If you sell the flipped property with rehab, they gave you a check for the whole thing, in this simple example you gave, you have:

Sales (Income) ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,Cr $150K

Cash ....................Dr $150K

For properties not held as rental, the building itself, and all its associated costs is like the COGS to calculate the net profit.

I own rentals, when I sell my buildings, I do a journal entry exactly as the closing statement so as not to miss anything. When it's all said and done, you should have $20K cash and $20K owners equity if I did the math right.

0 Votes

I am using GnuCASH software to record entries and have 2 properties where we are doing rehab. 1 of them were closed and just want to make sure how do I properly record entries. GNUCASH does not have Job Code or Project code like QuickBook. I have created sub accounts under fixed assets which has property name and for expenses also created sub accounts which records expenses for each property. I am confused how do I track profit/loss for each property.

Can you give example of chart of accounts:

1.Bought property for 100K

2. Paid 20K for rehab

3. Paid 10K for Interest

4. Sold for 150K

I have created

Fixed Asset Account
Bank Checking Account
Expense Account for Rehab and Interest
Gain/Loss account
Owners Equity account

First there is entry

e.g. 130K deposit to bank from Owner so I Debit Bank checking account with 130K and credit Owner Equity account

Debit Fixed Asset for 100K and Credit Bank checking account.

For Expenses 20K rehab and 10K interest , Checking account Credit 30K and Expenses against rehab 20k and interest 10K.

How do I put entry for 150K which should offset fixed asset and rehab interest & paid interest paid and also gain/loss account ?

0 Votes

For rehab property, we need to get Home Security which have month to month contract. House does not have internet connection also.

Most of Security company have few years contract which we don't want to take. What are best options ?

0 Votes

Looking for some hard money lenders who can work with us for some rehab projects. We are located in Bay Area, CA.

0 Votes

I am also interested in splitting cost for my rei pro

0 Votes

All Forum Posts by: Sanjay Gupta

Sanjay Gupta has started 14 posts and replied 36 times.

Post: Hard Money Lender rehab amount

Post: Accounting Question and how to properly record entries

Post: Accounting Question and how to properly record entries

Post: Home Security without contract and internet connection

Post: Looking for contact info for some hard money Lenders

Post: Investing software myreipro