All Forum Posts by: Stephen Menke

@Sean Tippens - As others have mentioned, I would progress into an actual accounting application. I use Quickbooks Online for my properties, and as an accountant, I highly recommend QuickBooks online for my clients. As you have three properties, it sounds as if you plan to continue to grow.

Given that, I would recommend QuickBooks Online with a proper setup to track each property separately through the use of Chart of Accounts, Class, and Customers. The clearer you track these now, the easier it will be in the future for more significant strategic initiatives (i.e., Cost Segeratio Studies).

Depending on how much cash flow you have, I would limit the add on apps (i.e., Hubdoc, receipt bank, bill.com, etc.) until the cost/benefit is there.

Message/tag me if you have any questions!

@Matthew Otero - Here are the quick bullets I give my clients. Yes, you will save money in the long run with QB Desktop. However, I think the long term benefits of Online may be worth the value, and I would recommend it as the portfolio grows.

Also, keep in mind that this is not a permanent decision. You can usually migrate from one to the other without too much headache.

1) COST - QB Desktop is sold as a flat application cost ($200-$1,000) while QB Online is sold on a Software as a service (SAAS) model (monthly subscription $10-$150).

2) UPDATES - W/ QB Desktop you will need to buy the new version and upgrade to receive any updates. W/ QB Online, intuit rolls updates out routinely in the background.

3) PROTECTION - W/ QB Desktop you are responsible for the protection of your files (e.g., file backups, potential corruption, hardware issues). W/ QB Online Intuit guarantees against such risk.

4) ACCESS - W/ QB Desktop you generally can only access it from the installed computer. However, there are other services available that you can utilize to host virtually. W/ QB Online you can access anywhere with an internet connection and have access to a suite of mobile apps.

5) ASSISTANCE - W/ QB Desktop you will need to share the file with an accountant or consultant either through a secure portal or via physical delivery. W/ QB Online access can be granted to an accountant online in minutes.

@Tyler Weerden - You have done your due diligence. And Based on that, you should be covered with that account. I mainly practice in Florida under different requirements.

Depending on your state, the savings account for the security deposit may need to be non-interest bearing. Additionally, you may prefer to elect it that way and note so in your lease.

@Tim Jahnke - I highly recommend Quickbooks Online ("QBO") and recommend their service to all our clients. Most accountants, CPAs, and tax professionals will be very familiar with it and it is pretty easy to give them privileged access directly from the program.

If the setup is done correctly, we should be able to reduce your time from six hours of data entry to an hour of reviewing the details every month.

Let me know if you want to discuss and we can assist with setup. Contact me here or via the details in my signature.

Without knowing the specifics, James statements is a fair assessment. From a tax perspective, think of it as each venture you branch out into stands on it own. Your stock market losses offset your stock market gains, your gambling losses offset your gambling wins, etc. This is also true for REI. As you REI starts to generate revenue, it should be relatively tax-free.

Rob - If you are open to a virtual relationship, we can help you out and are just up the road from you in Jacksonville, FL. What types of assistance are you looking for (accounting setup, maintaining your books, on-call advisory, etc.)? 

Please feel free to contact me here or via the contact info in my signature.

This may depend on the state and if it is crossing state lines. As I don't know all your details and cannot fully advise, but I personally choose single member LLCs. This option streamlines many things down the road for me.

With an LLC and just starting, be prepared to jump through a lot of hoops and to personally guarantee the loans with any lenders.

Also, know that this is not necessarily a permanent decision. As you grow as an REI, you can make changes to your legal structure for a cost that will not seem as significant as it does in day 1.

Regards,

Stephen

Outside of my Real Estate Investing, I have been providing accounting and CFO consulting services to small to medium business. This year, I have a goal to align the two practices and have picked up four new clients that are in the Property Management business. These four companies range from 160 - 650 properties under management. 

After reviewing all their reports, I realized that there are only three investors with more than five properties. I am starting to understand that Property Management companies are generally not solving the problems of Real Estate Investors.

My question to the community here is what is the most critical consideration when 1) choosing a property management company, 2) electing to go/stay self-managed, and 3) what is the most painful issue(s) you have with property management companies.

I am looking to identify solutions to such issues and coach these companies on such solutions to garner a stronger Real Estate Investor portfolio. And at the same time, returning value to REIs. 

Thank you in advance for your input.