How to simplify paperwork on 3 different LLCs.

Question

I spend 6 hours a month  looking at 3 different credit card accounts, 3 different checking accounts, scanning receipts, tracking mileage  and filling in  Excel income and expense sheets.

Scott Smith · Answer

@Tim Jahnke

First, I would recommend finding software to help automate much of the process. Many investors run into these issues between 2-5 properties, but eventually you either need to pay someone else to run your books or get software and learn to use it. The learning curve can be a bit painful and the first few months might take longer than usual, but once you get the hang of it you will save time and be able to acquire more properties without the fear of more paperwork bogging you down.

Another option many investors choose to pursue is placing their properties into a Series LLC. This allows them to maintain the liability separation between their different investments by placing the properties into separate "series," while giving them the ability to operate it from a single bank account and EIN. It would take some up-front logistics to make sure it's the best option for you, but an added benefit is that you can continue to purchase more properties and protect them without adding even more LLCs to your monthly paperwork.

This isn't legal advice, just my opinion as a real estate investor.

Nathan Gesner · Answer

@Tim Jahnke your profile doesn't give a lot of detail but it appears you've only got a few investments. Why do you have three LLCs? It seems you've added layers of complexity that are totally unnecessary.

Put property in one LLC, one checking/savings account, one credit card. There's no need to make things harder than they have to be.

Stephen Menke · Answer

@Tim Jahnke - I highly recommend Quickbooks Online ("QBO") and recommend their service to all our clients. Most accountants, CPAs, and tax professionals will be very familiar with it and it is pretty easy to give them privileged access directly from the program.

If the setup is done correctly, we should be able to reduce your time from six hours of data entry to an hour of reviewing the details every month.

Let me know if you want to discuss and we can assist with setup. Contact me here or via the details in my signature.

Natalie Kolodij · Answer

Sounds like you're at a place where a software would save you time.

QBO has bank feeds- so all those transactions import directly from the bank/ CC company. Then you just label what they are. As you go on it "learns" rules about how to label things: Example: Always label lowes as repairs.

You should still keep copies of receipts in the event of an audit, receipt bank is a popular app for scanning those in.

Dan Perrott · Answer

@Tim Jahnke - look into using quickbooks.  It has a learning curve but you can automate loading in transactions from banks.

We maintain 2 LLCs (separate books) and spend an hour or so a week maximum.  It allows scanning and saving receipts directly in the accounting books.  Additionally tax time becomes easier and more organized as you can share the books directly with your accountant.

How to simplify paperwork on 3 different LLCs.

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