Hello, I’m new to this site and have a question I haven’t exactly seen answered in my search. I’m looking to start using QuickBooks Pro or Premier. From reading these posts, I realize the online version is not as customizable, so I’m not going with that. In deciding between Pro vs Premier, I just need help deciding between the two depending on my needs. Hopefully this can help others in my situations as well.
I do real estate flips. I also have two other partners (family members). The money we use for flips is held in a joint savings & checking account. When we purchase a property, our equity position in the property is equal to our equity in the bank account at time of purchase. Each property can be different, depending on if a member puts money into the account or drew money.
We’re purely using this money for flips. Properties are held for 3 to 6 months on average. We’ve done four this year and hoping to do more. We’ve done many more flips in previous years and I’ve been keeping track of everything in Excel, but I’m looking for a more efficient way at handling our accounts.
In the future, we may add more partners as well. Either them adding money to our account or sharing title as a separate entity.
Any help or advice you can offer regarding Pro vs Premier (or another software?) would be greatly appreciated. I’ve been thinking of switching over to QuickBooks for years, but just didn’t know where to start. I’m finally going to make it happen! Thanks again for any of your advice!
QuickBooks Pro is fine. QuickBooks Premier focuses more on INVENTORY, for retail, or sales.
QuickBooks Pro handle flips nicely and it's cheaper.
Quickbooks Pro has enough features for real estate business, including flipping.
Just to give you a general idea on the setup. All expenses prior to selling the property should be classified as inventory, at least, create a category for acquisition, rehab, & carrying cost (you may break them down further into sub-categories if you'd like). Once the property is sold, move the costs from inventory to cost of goods sold (create the same categories/sub-categories as you have in the inventory). You can also set up categories to track for selling costs like closing costs, commission, professional fees, etc. Setup each property as Class then make sure you assign a class to each transaction. Create a separate class for admin expenses or any expenses not directly related to a property like office supplies, bank fees, office expenses, etc.
For tracking the money in/out by the partners, create equity account for each partner, money in as capital contribution, money out as capital draw.
By the way, Quickbooks online can be customized like dekstop version. However, most people stay away from it mainly due to its cost while others prefer it for convenience and mobility. Good luck!
@Dan V: Would you recommend setting each property up as a “customer”, instead of class? This would allow for using the class feature for breaking down costs by categories such as acquisition, rehab expense, holding costs, etc. This would also allow for deposits and distributions to be specific to each property as long as those items/expenses are set up on the chart of accounts. Your thoughts?
@Account Closed : Thanks so much for replying to my post and for the helpful advice!
@Julie Tucher I recommend setting up the property as Class and breaking down of costs should be done in the chart of accounts (setup as inventory and cost of goods sold). Setting up costs as COGS will give you a better P&L picture (Sales - COGS = Gross Profit) rather than having it set up as Class. You can even run a report showing each line as percentage of income (see below as example using QBO). For flip, I don't usually run reports by customer, so I don't track transactions using that field.
Thank you for sharing you’re knowledge, @Dan V.!
I'm now getting started with setting up QuickBooks Pro. I know there are a lot of books and videos out there. I'm looking for any recommendations on books/video training specifically for setting up the program for a rehab/flip business. We're a three member LLC. Any recommendations for learning the software would be greatly appreciated.