BiggerPockets Book Club Real Estate by the Numbers- Part 1
Welcome to our first ever BiggerPockets bookclub! This will be a chance for us to talk about what inspired us, where we have questions, and how we can become more effective investors. Please note our forum rules (found on the right hand side on desktop) as you engage with one another. We will be focusing on one part of the book per week, with new discussions starting on Fridays. You don't need to answer every question, just some questions you may want to reflect on. Remember there is some bonus content to help you. Info on how to receive it is found on page 29.
This week we are discussing Part 1: Personal and Business Performance
Questions to consider: Do you currently have a personal and professional P&L?
Are your business and personal expenses fully separate, co-mingled, or all together?
How was what you thought your personal P&L would look like vs actual look like?
What do you classify as liquid assets?
How do you currently track business and personal finance? Pen and paper, your own sheets, app?
Do you do a personal balance sheet?
Are there any P&L metrics you include not listed in the book?
Which P&L metrics do you find most valuable in your business?
When evaluating a property, what factors do you weigh first? Do you have a hard pass if it doesn't meet them, or do you make adjustments and continue to evaluate?
Looking forward to hearing everyone's thoughts!
Quote from @Andrew Michael:
Thank you so much for launching this book study! I have been making money for other people in real estate but now I want to start doing it for myself also.
Do you currently have a personal and professional P&L?
I do now!
Are your business and personal expenses fully separate, co-mingled, or all together?
No I have kept my Realtor business expenses and personal expenses separate for several years.
How was what you thought your personal P&L would look like vs actual look like?
I wasn't surprised. I knew approximately where I stood
What do you classify as liquid assets?
Anything I can get the cash within a week.
How do you currently track business and personal finance? Pen and paper, your own sheets, app?
I use Dave Ramsey's Every Dollar Program. I have one account for business and one for personal.
That’s exciting that you’re getting started after seeing the success of others. Proof of concept and you also have a ton of people to glean experience from.
Quote from @Barry W Bahr:I’ve done the same with my personal finances but ‘judge’ myself based on savings rate more than profits… To me, savings = potential investment opportunities = more wealth and/or future cash flow.The most important metric is whether or not I am making a profit.
The easiest thing is to keep one bank account for your RE investments and your personal bank is separate. Preferably at a completely different bank.
Then you hook it up to Stessa and it does a pretty decent job of the accounting and tax documents.
Hi All - Just found this forum as I was searching for some resource on the book. The book is fantastic but sadly I am confused by some math and I am looking for some place I can ask those questions. In particular the sections of DR, DCF, etc I keep getting different answers than whats in the book. Is there a place I can post the math problem? Is it here? Thanks in advance. I always thought I was pretty good at match but I must be doing something dopey here.
Hi I have read the book and have highlighted the entire book. I'm going back now and putting it into real action starting from chapter one. I have questions?
PFS-
1-Do I put my companies in here and if so How do you value them?
2-I'm guessing they go into the business interest category?
3- In cash or cash Do I put just personnel
Hi @Jimmy Bell
Thanks for reading the book, and happy to answer a few questions here!
1. Yes -- you should put your companies in there! Check out the chapter on the balance sheet for how to value the business -- you want to put the owner's equity on your PFS. If you own 50% of the business, put 50% of the owner equity on the PFS, etc.
2. Yes!
3. Just personal!
I hope this helps! Let me know if you have other questions.
Thx Dave