How Do I Deal with The Expenses across Multiple Flips?

Question

Hi! I am new to BiggerPockets, but have been partnering on a couple house flips in NJ. We always do full teardown and new construction. We started out flipping only single homes at a time, but now we have 5 projects going on at once. We partner with one contractor/team and tend to try to take advantage of economies of scale with materials, equipment etc. We even own some equipment, like a Bobcat, but also rent equipment.

We're having trouble breaking down each home into its individual expenses, mainly labor, materials and equipment costs and amortization. I realize we could try to separate things out more, track hours etc, but things are going pretty well right now so we don't want to add a bunch of overhead and kill productivity.

Does anyone with a similar experience have something that works for them? Any help is appreciated! Thanks!

Kelly Hering · Answer

Sorry for the delayed response! This was lost in my notifications. I appreciate your thoughts!

Scott Krone · Answer

@Kelly Hering  - good problems to have.  We have found it is better to establish systems during the good times, and they will carry you through the tougher times.  That being said, we have one over all company, and each of our investment properties are in their own company.  We also have clients.  It is important for us to keep all the bills accounted for each property.  The equipment could/should go under your overall company, and can be depreciated as asset.  It can also be "billed" to each project, similar to the materials.   Labor should be easier due to each worker recording on a daily basis were they worked.  If you are doing tear downs, they will tend to be on one job for a longer period of time.    Personally, each day I record which of the 8 or so projects my time went towards including the overall company.  Hope this helps.