All Forum Posts by: Simon W.

Quote from @Artur Kadesh:

Thanks for your advice! I have Buildium right now and I like the tenant management part so I think I will just add QBO for an accounting I can also file 1099.

 Buildium can file 1099s. I did it for my clients.

run cash summary report

Quote from @Nadir M.:

Property managers, how do you collect rent from tenants, keep your management fee, and send the remainder to the owner without it reflecting as if you received the full rental income in your bank account?

Are you using a specific property management software to handle this automatically, or do you have a different system in place to ensure accurate tax reporting?

Would love to hear what’sworking for you!

Thanks!

You need to reflect the full rental income that you collected on the behalf of the owner. Any PM software should be able to do everything you mentioned.

I am not a PM but I am an Accountant/CFO for PM companies and real estate investors. The PM must show the rent income collected less the mgmt fees and other expenses, distribute the remaining amount to the owner.

Quote from @Blake Hanson:

Quote from @Erik Acheff:

I know this is an old post, but I can not find an answer online. If the property manager uses a payment app integrated with the property management software to collect rent for the landlord, this is not gross income for the property manager. Yet the payment processor is issuing the 1099-K to the property management company. I have this issue with Buildium for all the online rent payments received through their payment app. Has anyone else had this same issue?

Did you ever find a solution? My CPA was unsure... do you issue 1090-NEC for the difference between 1099-K and 1099-MISC or do you double up the income (i.e. 1099-NEC for gross rents from PM, 1099-K of the net owner distribution on 1099-K, then owner reports double income and puts a line item expense for the 1099-K since 1099-MISC covers gross rents).

You need a new accountant lol

PM issues 1099-MISC, not NEC for rental income paid to property owners.

You would still issue the rental income paid to the owners regardless of the payment method.

The Property Owners should add an expense line item on Schedule C stating that income reported twice on Form 1099 to offset any duplicated amount. The property owner's tax professional can help them with that and ensure they don't pay taxes twice on the same income.

Disclaimer: My advice/opinion in this post is just that, my opinion. Please consult with a professional. Reading or responding to this post does not create a client-accountant relationship or any other professional relationship.

Quote from @Amish J Patel:

Hello everyone,

I am a new investor looking for my first property (ideally multi-family, 2-4 units) in the Eastern PA region. Open to the greater Philadelphia region extending to the Lehigh Valley with a budget up to $500-600K. 

As a new investor, would prefer something in the Class B range, ideally closer to turn-key but open to doing some minor rehab if needed.

I grew up in Montgomery County PA so am familiar with the areas. Curious on people's thoughts of the long term potential of the Lehigh Valley, and any one area in particular such as Allentown vs Bethlehem vs Emmaus. 

Looking forward to any suggestion and advice going forward as I try to navigate this journey!

-Amish Patel

 If you are truly interested in ABE area, I think we should connect. 

Turn-Key won't give you much value since the selling price already considered the increase so you would be paying at the ARV.

Quote from @Garrett Ramela:

Quote from @Simon W.:

I already knew something like this was going to eventually happen. When you have employees promoting the platform like it is the best platform ever and free accounting services, it was going to go down sooner or later.

Pretty sure their other services are going to go down shortly.

Baselane is offering assistance I believe, but they are just like Azibo. Eventually, they will follow the same fate.

If you are dealing with FinTech. it is going to happen.

 Interesting, thanks for sharing! Do you think this issue is specific to banking services or what do you think is the root cause? I get FinTech is a high-risk activity, but imagine the industry will consolidate to one or a few strong players. I heard Baselane is offering assistance, so I will check that out, thanks!

I don't have any specifics but as someone who is into tech, accounting/finance, and a consultant to grow businesses. I can only imagine that they got a bunch of big time investors and business loans to grow this out. They pay themselves good "salary" from the loans they get. Once the funds are up and they can't repay the loan(s) back because offering free services are just enticing new investors that do not have a real system setup. No one wants to pay for anything. 

Realistically, to make the business work, they are hoping all the people who are using the "free services" to eventually go into banking where they can collect fees for anything bank related. They aren't the actual bank so need to upcharge these fees and hoping in volume they can make enough to continue operating. 

More than likely, the same people created these startups are doing pump and dump. They will just create the same exact system and rebrand it. They will try to partner up with some CPA from BP and market to BP members. In this case, Azibo was super strong on bugging me when they first started. It all starts like that. Baselane is doing the samething, it gets flooded with promotion on these platforms.

The said CPA or his team actually got my client into trouble with the IRS. Something I caught within 10 minutes of looking at the financial. This is also why I think Azibo will go down. I look at who the company associated with.

These are just my opinion about it. I have no facts so take my opinion with a grain of salt.

I already knew something like this was going to eventually happen. When you have employees promoting the platform like it is the best platform ever and free accounting services, it was going to go down sooner or later.

Pretty sure their other services are going to go down shortly.

Baselane is offering assistance I believe, but they are just like Azibo. Eventually, they will follow the same fate.

If you are dealing with FinTech. it is going to happen.

It might because they don't want any random person just setup a property management software to make it look legit and using it to scam people (tenants)

this is where the gray area comes in with accounting. And people think Ai is going to replace accountants.

one can argue that apartments.com is just a processing the payment and not actually holding the funds to transfer out.

If apartments.com all of a sudden reverses the payment for insufficient funds?

Of course the OP received the funds but the point I would argue is that if the OP received in Jan and not Dec in his bank account. It would be Jan income.

He only knows about it, but if an accountant is just running his books on QBO or another platform and only connect with the feeds. The accountant would record it as of Jan and not Dec. 90% of the real estate investors are running cash-basis. To record it as December, you would have to back date it and the bank reconcilation would be off.

Quote from @Andrew Katz:

My tenant paid a portion of their rent for December on 12/31/24 (late). I use apartments.com, so the money didn't end up in my account until 1/6/25.

Is this considered income for 2024 or 2025?

 It is most likely 2025 income. It depends what basis you are filing under. If you had to ask this, it is most likely 2025 lol