I was having lunch with a very savvy real estate investor who has so many balls in the air it was incredible.
From what I gathered from our conversation he has over 20 rental doors, multiple air B&B's, he runs his own window installing business that is continuing to grow, and just bought land and is going to be breaking ground on a new multi family property.
Not only that, he owns a 2 laundromats, and a car wash and is looking to expand into storage units in 2021.
Here is where it gets crazy for me, he told me that his wife does all the paperwork... and they do everything old school. Stamps and letters style. He says she gets mad at him when he buys more stuff because that only means more paperwork for her to manage and keep track of.
I want to be of service to them, they are clearly running a great operation, and I understand if they have a system that works for them I don't want to get in the way of their method, but he said that the cost of stamps are killer. I figure I could help them transition into the 21st century and take some things off their plate so they aren't up to their eye balls in paperwork. They don't fear technology or anything, I just think they managed to scale without getting the proper systems in place until after it was too late.
So fellow bigger pocketers, what type of software do you guys use to manage multiple projects, to make sure all your bills are paid on time, to make sure all your contractors are paid on time, and make sure that you get rent collected when it needs to be? I'd like to offer them anything just so his wife see's him buying more things as a good thing instead of a bad thing, so they can focus on spending time together as a family and not so much time worrying about their business.
Any insight on what software you could recommend would be great! Thank you so much!
@Nate Martin I use Cozy.co. It’s free. I like it. It has online application and rent collection- tenant pays for background and credit checks.
Then I use Stessa. It’s free. For bookkeeping.
Then I use my bank to pay contractors electronically.
If there is a better system, would like to hear about it!
For perspective, I'm nowhere close to the scale your friend is. I have my W-2, a side business, and my wife has her business. On the real estate side, I have an offer in on my first deal. I'm assuming most of the hassle is coming form keeping the books.
I'd say the first thing is online accounts. Pay as many things online as you can either through the individual entity or the bank's. Almost everything goes on the business credit cards and that narrows it down to just a couple of places to pay. If it works the same way for business checking as it does for personal, which I haven't had to try for the above reason, you can pay entities through the bank's website and if there is not a electronic relationship the bank will mail a check at no cost to you. I paid my rent for years this way, and even set it up to go out automatically.
A second thing that expands off of the first is financial management software. QuickBooks is an option, but it's really expensive. I've been using Quicken for a couple decades now. They have a Home & Business version that I'm using. It allows you to split out your personal, business and rental activities. I'm not sure the break point where QuickBooks makes more sense than Quicken. Either way, you can download the financial statements and transactions from accounts and reduce the manual entry time. You can also split different businesses out into different files if things are too confusing in one. I will note that there is a Bill Pay feature in some versions of Quicken, but I've never used it.
When it comes to managing online accounts, a password manager is a must. It allows you to have just one long, strong password to remember, and then use a different long, complex password on each site. A couple good ones to look at are LastPass, 1Password, and bitwarden. You can have family or business accounts with these. It allows for each person to have their own password vault, and share passwords for specific sites with others, without needing to share all their passwords.
That was a bit long and rambling, but hopefully it helps you out some.
@Nate Martin . Sounds like a simple property management software and quickbooks would solve most of their issues.
At that scale, I would say QBO is a must for accounting. If they have PM for those properties, those statements will have to be reconciled to QBO as well as bank, cc, and mortgage statements.
For bill pay, check out bill.com
If they have employees, check out Gusto.com for cloud based payroll.
It would also make sense to touch base with their tax preparer to make sure that your system is set up in a way that will be most efficient come tax time.