The Books?

Question

Hello hello BP nation, today while I was listening to one of the BP podcast 'The books' or the paperwork was discussed. Being a newer investor trying to ay my dues I was curious to see if anyone had a direct link or advice pertaining exactly what 'the books' consists of.  Naturally I or my beautiful wife or someone that I hire out would keep tax info, receipts, and the like, just looking for more detail step by step details that will help out.  As always thanks BP!

Ned Carey · Answer

@Taylor Rider  Obviously keep receipts and records of all expense related to your business.  "the books" would be a paper ledger or software to keep track of those expenses and categorize and organize them. Well kept books are not only important for tax purposes but also for good reporting.

If you spend money at Home depot for example you  not only want to keep track of how much was spent but what was purchased and what house it was used on. If you have multiple houses you want to be able to track expenses by house or perhaps also track expenses by tenant,

You also want to know where the income is  coming from. Is it from rents, wholesale deals, security deposits, Notes or tax liens, Rehab and resales, earnest money deposits etc.

Initially you can use a simple Excel spreadsheet, Ultimately you probably want to move on to more sophisticated software. There are property management software packages but I and many other investors use quick books. This is something accountant will certainly be familiar with.

I'm not really sure what you are looking for in your question but I hope that helps.