All Forum Posts by: Simon W.

As an Accountant and CFO with two decades of experience in real estate management, I’ve observed that landlords often handle things differently. However, it is perfectly acceptable to combine all tenants’ security deposits into a single account. Some banks even offer features that allow account holders to manage individual tenant information within one account, making the process more convenient. About 15 years ago, Chase provided such a service, though I am unsure if they still offer it today. Essentially, it was one account with the bank tracking individual tenant details on your behalf.

That said, it’s critical to ensure your financial records remain accurate by reconciling the account on a monthly basis.

Quote from @Shawn M.:

@Andrew C.have you made the switch to xero? how is it going, I am with QB but need to switch. 

 Xero works fine. You should check if the bank feeds work with your bank otherwise, it's a deal breaker unless you don't mind manually doing the data entry.

@Alecia Loveless  what was the reason behind your CPA's request? 

Quote from @Saad D.:

Hi @Simon W.Thanks for replying. At Baselane, we're going to build the custom chart of accounts and Balance sheet.

Just for my own understanding, I'd like some clarification on your statements.

1. I don't really understand what you said about edit charts of accounts. If most investors, and by most I mean 95% are not accountants, then why do they need to edit chart of accounts? I'm genuinely asking to understand the use case for my self for an individual investor.

Re. balance, as someone who is a former CPA and has prepared financial statements for multi-billion $ funds, I understand the important of a balance sheet. Based on the user research we've seen most use cash flow as a proxy for performance. Many, if not most, want to have this data, but a very high % don't calculate monthly performance. They usually tally it up at the end of the year. Has that been your experience with RE investors?

My question back to you about Balance sheet is what % of RE investors that are not accountants understand what a balance sheet is and how do they actually use it? (Do they know how to use it)? Would love some actual reference to data if you have it (not anecdotal). 

Thanks

If investors are doing multiple real estate ventures, construction and rental, it would help that they can do the accounting correctly. 

If you were a former CPA, then it should know why investors should be looking at it. If no one tells them about balance sheet, then real estate investors aren't going to focus on them.

My clients are always looking at the balance sheets after I taught them the importance of it.

There are a lot of times not just real estate investors, just regular business owners, they look at the P&L and say great, I made $100K this year, but my bank is showing $10K, where is the rest of the money. The P&L isn't going to tell you that, you need to see the Balance Sheet.

Put it simply, if an investor decided to hire someone like me to start handling their books and have to gather their financial statements, I would be charging an arm and leg to put it correctly. If they are using only P&L. I would need to figure out the building and land, mortgages, contributions, improvements and such.

Quote from @Joanna Highet:

Looking to change CPA's to someone with more of a real estate background that can provide tax planning advice and strategies. We have a high W2 income to offset, started a LLC in property management and will close on our 3rd rental in a few weeks. Planning to add 1-2 properties per year. Current CPA and bookkeeper provide little guidance and do not appear to have the vision or knowledge we are looking for. Would love any recommendations. Thanks!

Not all bookkeepers are real estate savvy. Michael Plaks method of finding someone here is the best way.
Although I can do prepare and know enough tax information but I personally do not tell my clients that just because it isn't my specialty. I know enough how the financial should be for CPAs to file tax returns. I know enough lol

Everyone's skillset is a bit different here in BP, one is probably catered more towards a niche that someone is looking for. 

Good luck with your search.

Quote from @Saad D.:

@Simon W.Great questions. 

Baselane offers cash flow at the unit, proper or portfolio level. Yes, you can consolidate it into 1 report.

Balance sheet- this will be built next year. It's not as highly requested as one may think for multiple reasons (we're building based on feature demand). 

Edit chart of accounts - not at the moment. We offer over 120 categories that are real estate related and periodically add more based on customer requests. 

How do you use edit chart of accounts feature and for what use case?

I think users aren't requesting the balance sheet is because they don't know that they should be seeing it.

"You don't know what you don't know."

Most investors using baselane aren't accountants or financial advisors.

Being able to edit Chart of Accounts, add or remove, is very useful.

For instance, I have a client that owns rental properties and build construction homes. Either sell or convert it into a rental or a STR.

Having an editable Chart of Accounts is key to dealing with these type of clients.

From what I gather, Baselane right now only focuses on P&L. 

Balance Sheet can show how much was a building was purchases for, how much principal loan is still outstanding, how much is in escrow and how much is in tenant security liability, Construction typically in the long-term development are put in the balance sheet and not P&L.

Most investors are doing multiple type of real estate, not just rental. This is why it is very important for these type of reports.

The first thing I learned in Accounting 101. Balance Sheet is a snapshot of the company's financial health at a specific point in time.

Income Statement is a showing us the health on an operating POV. Income Statement shows a company's income and expenditures over a period of time.

Balance Sheet is like the Head/Brain of the company and Income Statement is like the Body. 

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I am constantly seeing the constant push for baselane. I am a consultant and accountant so I am always open to different platforms.

My question for the baselane users here, does it generate balance sheet? cash flow reports, 12 month cash flow reports? Can you edit Chart of Accounts? Can you generate any of these reports as well as the P&L for each property? Can it consolidate all the properties into 1 report to see the overall picture?

Without these reports, you can't truly see a full picture of your financials.

I am proadvisor for both QBO and Xero. I use Buildium and AppFolio. I love Yardi Voyager. All of these platforms can do all of the above reports and more. I can never recommend any products without these simple reports.

thanks in advance for the answers.

Quote from @Matthew Morrow:

Quote from @Simon W.:

Quote from @Matthew Morrow:

Quote from @Simon W.:

Quote from @Matthew Morrow:

Hi everyone,

We’re launching a property management company early next year (PA), but we’ve run into a bit of a roadblock with software. We’re big fans of AppFolio, but they won’t demo or consider a new account until we have 50 active doors. While we’ll be close to that number soon, we don’t want to jump the gun.

Are there any other platforms you’d recommend as a temporary solution for managing fewer doors until we hit that 50-door mark?

Thanks!

Congrats - Buildium will work but AppFolio would be a better choice. The transitions will be a pain though if you were to set everything up in Buildium and decide to switch over to AppFolio later on.

I didn't know you were in Allentown lol

If you know how to use AppFolio already, you should just wait until you hit the 50 units and go with them. Learning a whole new platform isn't fun. I am still using them both. 

Disclaimer: I am not a PM, I consult and handle the books for clients that uses them.

 Hey @Simon W.

Thanks for the info! We’ve quickly realized that reaching the 50-door milestone will be easy. For the first 49 doors, we’ll be running an in-house system as a beta before transitioning to AppFolio, which is clearly the best long-term solution without needing to restart the entire setup.

Lehigh Valley is definitely home—it’s where all our businesses and rentals are based, and our team/brokerage operates here too, with plans to expand statewide soon. We feel incredibly fortunate and excited for what’s ahead!

Sounds awesome. If you ever need help with consulting or reviewing the financials, I can stop by!

 Sure thing. I noticed your from here and NY. What type of consultation / ops to you do?

I help PM firm scale and help streamline their procedures. I make sure the accounting side of AppFolio is headed to the right direction in terms of SOP. I also do like fraction CFO work so I can oversee/manage the controller and the accounting dept. 

You don't know how many times I've seen PM companies not entering receipts correctly. Move outs can mess up the accounting big time. There is a section in AppFolio called Financial Diagnostic that a lot of people even look at. This is a big piece to make sure accounts are tied out. It isn't 100% correct but majority of it tells you what you need to fix.

I was from NYC and moved to PA like 6 years ago. 

Quote from @Matthew Morrow:

Quote from @Simon W.:

Quote from @Matthew Morrow:

Hi everyone,

We’re launching a property management company early next year (PA), but we’ve run into a bit of a roadblock with software. We’re big fans of AppFolio, but they won’t demo or consider a new account until we have 50 active doors. While we’ll be close to that number soon, we don’t want to jump the gun.

Are there any other platforms you’d recommend as a temporary solution for managing fewer doors until we hit that 50-door mark?

Thanks!

Congrats - Buildium will work but AppFolio would be a better choice. The transitions will be a pain though if you were to set everything up in Buildium and decide to switch over to AppFolio later on.

I didn't know you were in Allentown lol

If you know how to use AppFolio already, you should just wait until you hit the 50 units and go with them. Learning a whole new platform isn't fun. I am still using them both. 

Disclaimer: I am not a PM, I consult and handle the books for clients that uses them.

 Hey @Simon W.

Thanks for the info! We’ve quickly realized that reaching the 50-door milestone will be easy. For the first 49 doors, we’ll be running an in-house system as a beta before transitioning to AppFolio, which is clearly the best long-term solution without needing to restart the entire setup.

Lehigh Valley is definitely home—it’s where all our businesses and rentals are based, and our team/brokerage operates here too, with plans to expand statewide soon. We feel incredibly fortunate and excited for what’s ahead!

Sounds awesome. If you ever need help with consulting or reviewing the financials, I can stop by!