All Forum Posts by: Dan V.

@Pat L. I think you should be fine using class for each LLC and if one LLC has more than one property, you can use sub-class. The possible challenges in using single QBO account for multiple entities are:

1. Tracking any intercompany transactions if you more around money between entities, so make sure you set up categories to track those kinds of transactions. 

2. You may not be able to run an accurate balance sheet for each LLC. There could be a workaround if you know what you're doing.

3. There's a limit in the number of class you can use.

@Jarrod Willis You're on the right track in seeking professional help for setting up your books and accounting process for your flip business. There are professionals here in BP that are specialized in the industry and in Quickbooks, try reaching out to a few of them. In a nutshell, the books should be set up in a way that will track your acquisition, holding, rehab & selling costs and of course sales revenue by property. The level of detail you wanted to see is a matter of preference, but that will also entail more effort and time. 

Just for curiosity, what exactly is included in the $200/month subscription (data entry, troubleshooting, etc.)? Are they assigning you a specialist knowledgeable in the industry?

If you are purchasing it under LLC, make sure you know your options if you are planning to refinance it later. Banks or traditional lender does not usually lend money to LLC, hard money lender usually does, but for higher closing costs and interest rate. And if that is the plan then you should factor that in your analysis and make sure the numbers still look good even in that scenario.

Congratulations on your first deal and good luck!

@Yenn Reyes Welcome to BP. I'm also a newbie investor in Norfolk and currently working on closing my first deal. Try searching on meetup as well, there's a monthly networking event organized by @Taylor Hudgins and team, which is also posted here in BP. 

@Chase Hoover I am currently developing a process/system to capture the breakdown of the net payout (Booking amount, cleaning fee, service fee & management fee[aka tourist tax]) using excel and excel importer app, then import into QBO, it is not fully automated but I get the breakdown that I need. I also use the reservation number as reference ID in QBO for easy tracking. So far I was able to tie the Airbnb numbers but I'm still working on the VRBO, I find its reporting more confusing. I'll keep you posted!

@Karen Chenaille We would love to see the screenshot of your report generated using the OwnerRez integration. 

@Kevin McGuire The breakdown of expenses or assets (ie. HVAC) should be set up in the chart of accounts, properties should be set up as Class and as Customer/Tenant. Location is ideal if you have 2 separate business model in one entity (ie. rental or flip) and has 2 separate bank accounts. If you want to move them to class and don't care about the details of historical data, you can lump them together and make a journal entry (at least per year) thru 2019 and start tracking the class in 2020.

I'm working on my first flip property and currently shopping for insurance right now while waiting for the inspection. I talked to one local agent so far and the quote was a little over $900 for a 6-month builders insurance, including vandalism, property in-transit & $230K property coverage. Since it's my first, I'm not sure if I'm getting the right coverage and the right price. Do you think the price is reasonable and what coverage do you recommend for first-time flipper?

@Kevin McGuire I use class for each property. The reasaon, location can only be used at header level, meaning you can only assign it by transaction while Class can be assigned at line item level, which means if a single transaction is for 2 or more properties, then you can "split" the line item and assign class for each line. 

@Cory Lucas It seems like you accounted for everything that you need to however, the numbers you used might be off so you have to double-check to see if you are using the right percentage and amount based on different factors (market, condition of the property, location, etc). If you still came up with a negative cash flow, I would pass or change your offer amount. Good luck!

@Ducote Kiernan You will pay tax on the LLC's net income (income less expenses including depreciation/amortization) not on the amount you pay yourself. Before you pay off extra on the loan, make sure you have a good amount of reserves for repair, capex (major repairs, upgrade), turnover expenses, taxes, etc. Paying extra will lower your interest expense (less tax deduction) and higher equity properties are more target to lawsuits (mortgage can be good protection too).

Talk to your accountant about what your goals are so he can align the best strategy for you.