Rehab Reserve and correct accounting
I am definitely going to meet with a CPA, but I want to understand on my own as well. We did our first HML this year, and I am confused about how I treat this for accounting purposes. I am using Wave Accounting. I don't quite understand how the Rehab Draw should be recorded. The Rehab Fund of $20k is part of the mortgage loan, so it's a liability. But as I spent each amount to purchase flip items, it also is automatically coming out of the bank account. If I classify each purchase as COGS, then it's showing up twice (as COGS and as part of the loan). Any help would be appreciated!