All Forum Posts by: Account Closed

Originally posted by Jeffrey Koenig:

Is there a tutorial about using it for REI?

I am in the process of creating an interactive one for a private site. Unfortunately, I can't make it available here. But, I will answer any questions and help here independently of the content on the other site.

Originally posted by Mark Yuschak:

Thanks for the replies. Maybe I haven't given QB a fair shot so far...

To take my question to the next level... What do you for rehabs, specifically? Do you simply log all the receipts for Home Depot, contractors, etc.? Then, how about the initial cost of the property? What is that classified as?

Let's take it in steps.

First, a property purchase is entered into an asset account. That is where you record the initial purchase price with a corresponding entry in either a cash account, if you paid cash, or a liability account tracking any financing on the property. Obviously, I am leaving out some of the double entry minutia here but if needed we can get on the phone and walk through it together.

By definition a "rehab" is a capital improvement that increases the cost basis of the asset. Home Depot and the others are vendors who will give you invoices or receipts. The payments will be applied to the property asset account as a debit, increasing the balance.

Loans you owe are liability accounts joined at the hip to the property asset account. Well, not really, but double entry accounting makes it act that way. The interest is an expense account as well as things like PMI, property taxes, etc. This is where it gets fun. The borrower is setup as a customer and the loan is a job for handling payments and it is also an asset so it ends up in an asset account too. The payments are applied to the appropriate accounts when they are received. Interest ends up in income, principal gets applied to the asset account reducing it and a corresponding entry to track the income part of the principal as income and another entry in the asset account of the property for the part of the cost you recovered in the payment. If you escrow funds for things like property taxes, insurance, etc, then it gets applied to the appropriate escrow account and then entries are made when the actual expenses are paid.

Set up this way, the reports are actually accurate without adjustment and your CPA will love you.

By the way, most of the movement between accounts should be setup as memorized transactions so that you just enter the receipt of a payment from your buyer for example and the other stuff flows through automatically.

When setup correctly, QB is an excellent accounting choice for landlords as well as wholesalers, rehabbers and the like.

If you are having to "force" your transactions then it is just setup wrong. One very common mistake is setting up tenants as "customers".

Yes, it is best to stay away from numbers in anything OTHER THAN the private placement memorandum. Even in there you should not PROJECT returns in any way that looks like, smells like or even remotely resembles a guarantee.

Private placement of debt can talk about the interest rate you are willing to pay in the PPM but only in there.

Also, make sure you are very clear that you are looking for qualified investors and not the average joe with $5000 wanting to loan to you or invest with you.

Just be very careful when you quote specific interest rate or ROI numbers to potential investors. This is an area where many trip up and get themselves into trouble with the regulators.

Originally posted by Caitlyn Coyle:

Seasoned money in the bank is not considered income for loan qualifying purposes.

True, but the lender will be looking to see where his stated income monies end up. That is one reason they require the bank statements.

Originally posted by Joshua Dorkin:

What's going on here?

I think you are just looking for something to be critical of the new Administration.

Some spouses are more involved in their husbands' administrations than others. Each President chooses how to list the spouses on the website. Presumably, they even discuss it with their spouses. They chose to do it this way. If you click the links it goes to their well scrubbed and sanitized bios.

Fayetteville Real Estate Investors Association is in your area. They meet the first Tuesday of each month in room 200A at 5511 Ramsey St in Fayetteville.

However, I've found most of these associations have lots of people wanting to sell services like mentoring and few active and experienced investors. I know nothing about the one in Fayetteville even though we own property in that area. For a buy and hold investor, areas around large, stable military bases is almost a license to print money.

Before tax.

Naomi Wolf certainly isn't THE most ignorant person on the face of this planet but she is running hard to win that spot. :roll:

What?!?!?!?

Don't you believe the savior being inaugurated on Tuesday is going fix all of this? :cry: