All Forum Posts by: Max Emory

 @Henry Lazerow, thanks for your perspective. I apologize if my post offended you.

I have leveraged rentals that cash flow as well. I'm not saying it's impossible or they don't exist. I'm only saying they're not as prevalent as the ones that do not cash flow.

 Very well said, @Joe Villeneuve. Thanks for the perspective!

 Hey @Joe Villeneuve, I'm not saying it doesn't exist. There's exceptions to everything. I'm just saying it's rare. It's not as much of a thing as most REI education companies make it to be.

@Mary Jay, the $800-$1k sounds like phantom cash flow or spreadsheet cash flow that gets eaten up by repairs/maintenance, turnover, vacancy, CapEx, etc.

I've owned rentals (with leverage) since 2019 and our REI bookkeeping firm has serve tons of landlords. From all of that data, it's abundantly clear to me that any rental that has debt doesn't really cash flow. It may cash flow for a year or 2 but once things start breaking or something goes south with a tenant or it sits vacant for a few months, all of that previous "cash flow" is wiped out.

The business model is a high CapEx / low cash flow business model relative to the value of the assets.

Rentals are a great long-term wealth-building vehicle (appreciation, loan pay down, tax benefits, etc).

Don’t rely on them to pay for your groceries.

@Charles Evans, definitely keep all paperwork associated with your tenant (lease, receipts, etc).

For expenses that are not split per unit but are for the entire structure (utilities if not separately metered, mortgage interest, etc), keep a record of those payments so your tax pro can deduct a percentage of them for the unit you're renting.

Hey @Kevin Brown, we use QuickBooks Online exclusively for all of our REI Clients. I use it for my personal portfolio as well. We've found it has superior reporting features, integration features, and is overall more efficient to work within than other REI-specific software.

The downside is QBO is not set up for REI so you'll need to do that or work with an expert to ensure it is set up for your business appropriately. That's the key component that is usually missing when I hear other entrepreneurs/investors say they don't like QBO.

Something else to keep in mind is your entity structure and how your entities file tax returns. As a general rule, each entity that files a separate tax return (partnership, s-corp, c-corp, etc) will need its own QBO subscription. If entities are disregarded, you can keep up with more than 1 in a single QBO account using the location/business feature to keep track of them separately. This will save you on subscription costs.

QBO is a monthly subscription but most accounting software are.

If you want to discuss any of this further, I'm happy to answer questions and help walk you through it.

Best of luck!

Hey Alec, agree with @Jake Baker. Relay bank is good. You won't open a "business" account unless your property is held within an entity.

Hey @Michael Thyssen, our firm specializes in serving REIs. I'm happy to collaborate with you to see exactly what you need.

I also have a large network of REI-savvy bookkeepers I can refer you to.

Let me know if you're interested in either of those options.

Here to help!

 Hey @Justin R., it's a pain to transition software no matter what you're coming from or going to. I do agree that QBO is expensive. They've increased the price several times in the last few years. 

And, yes, your bookkeeper will have to learn the new software if they aren't familiar with it. Or, you can find a bookkeeper who is already familiar with the software.

@Sebastien Tinsley, it seems like you're doing all the right things. Consider working for a seasoned REI in your area who is doing what you're interested in within REI to learn the ropes. You can jump ahead years doing this and break out on your own once you're ready. I've seen others do this and now they're ahead of most other people who started when they did.