All Forum Posts by: Ilya Ratner

Quote from @Greg O'Brien:

@Nathan Gesner spreadsheets can get you pretty far, but the entity type matters.

What we often see are STRs in partnerships but there is no balance sheet kept, or at best, its a PM balance sheet which doesn’t tie back to the partner’s capital accounts (due to asset/debt not being reconciled).

Since the IRS requires B/S reporting over the asset threshold, this is often a surprise to some RE partnerships at tax time. In all reality a real business needs a reconciled balance sheet anyways.

Exactly what I am use to seeing. Makes total sense thanks!

@Julio Gonzalez, first of all thanks for putting these links here; extremely helpful!! Just to confirm I understand your statement correctly. By doing cost seg to your property, and taking the bonus and accelerated depreciations on certain assets you can recapture the cost of the lost assets that were lost in a flood/fire?

"An Engineered Cost Segregation Study gives the ability to substantiate the replacement costs to the insurance carrier. This enables an insurance agent to go to their underwriters for the most aggressive pricing. The underwriter will have a very high comfort level of the risk due to the comprehensive building review in their file.

What if something happens to your building? I am sure we have all played the insurance game and it can be quite frustrating trying to collect for what you need to replace or repair.

A cost segregation study can serve as a substantive document that an owner can use as support to a claim that is being disputed to their favor. The depth of our reports helps an owner to avoid the need to hire a third party professional to justify their claim.

To an underwriter this becomes a disclosure safeguard whereby at time of claim the owner is able to substantiate a full disclosure position with the insurance adjuster which puts the onus on the carrier to pay!"

Quote from @Leslie Anne Morris:

REI for my personal portfolio and QuickBooks for managed units.

 Whats the difference between personal portfolio and managed units? 

Hi All,

How do you track your income and expenses for your STR? Especially if you're managing more than one property.

Thanks for your help

Quote from @Michael Baum:

Well @Ilya Ratner, good accounting is always a must.

As for tech, there are a number of software solutions that can make things easier, but it still takes the owner to input the data. I suppose you can use something like Mint to automate input to some degree. I just use Excel (well an equivalent.)

As for  accounting reporting, that is something that could be helpful to some that are growing their portfolio.

Correct, as an individual who works in the industry, I saw first hand how good reporting and strong financial standing dropped 1 to 2 basis points from mortgages and refinance, and banks always wanted to deal with you. Becoming institutional investor/real estate professional, and building the right long-term relationships with the banks would make a huge difference on the long run. 

Quote from @Nancy Bachety:

Thanks for your offer and welcome to BP. Do you have expertise in STR's?

 Hi Nancy, I do not, but I do learn fast and it should be similar to long term leases from accounting operations perspective at the end of the day

Quote from @Paul Sandhu:

Are there any real estate applications for the Black Scholes option pricing model?

Technically, you can use any financial calculator and calculate it. Here are some more resources on this topic:

https://apps.apple.com/us/app/...

https://www.investopedia.com/t...

Quote from @Michael Baum:

Hey @Ilya Ratner, welcome to the forum. Looks like you opened a can o' worms!

 Ha! I love having difficult conversations ☺️ the more the merrier. I had a couple of questions myself to the forum. 
1. Would there be a technology that can solve the accounting operations for str?

2. The way big landlords do RE in NY is make good decisions on their properties by getting good accounting reporting. Would that be something that can assist the common wealth to become big operators? 

Quote from @Katie Miller:

Quote from @Ilya Ratner:

Hi everyone, I am a real estate accountant in NYC and has been doing it for the past 6 years. I primarily do day to day operations for residential buildings in NYC. Ask me anything

At the prime of it I managed 10 residential buildings with 50 units and 2 student housing units with 1800 beds. I use Yardi, and it is very robust system. Not sure you need it for 1 str as quickbooka can do the job for you, but on a larger scale definitely worth investing in a good software like Yardi

 How many building/units do you manage in total? 

Whats the best accounting software for an investor just looking to get started?

Quote from @Wendy Man:

Thank you for doing this. For rentals categorized as passive investments, it can take a decade or more (esp. With depreciation) before a property has a profitable year.

Would the hobby tax or similar apply in this case?

Same answer as before, as long as we classify it as a business, we shouldn't be concerned about losses - because it will off set the other income. Passive losses can offset passive gains. I hope it helps