All Forum Posts by: Kristen Ambrose

Congrats on starting your investing journey! It's great that you're thinking ahead on how to optimize your systems. 

If you plan to grow, it may be worth upgrading from the excel spreadsheet now to save yourself the headache later. There's nothing worse than trying to learn a new software while you're in the thick of it with a growing business. 

It's also a good time to consider what will work best for you when it comes to bookkeeping. Most of my property management clients use a PM software as well as QuickBooks, but RentManager seems to be a good option with both. 

The QuickBooks Online Plus subscription could be a great option for you. You can use the Business field to separate between your real estate agent business and your investing business. Then use the Class field for each of your rental properties and a general real estate agent class. 

That way you can run separate reports for each business and by rental property. 

I would agree that this fee seems reasonable for your personal return including the three properties. 

Always a good idea to ask though!

I find QuickBooks Online to be very simple to use and will provide exactly the reporting that your tax CPA is looking for (as long as you keep up with the bookkeeping and categorize correctly). All of my real estate clients use the Plus subscription which will run you $90/month. 

Congrats on purchasing your first property!

I agree with everyone above, you can definitely do the bookkeeping yourself at this point within excel. As long as you keep everything in a separate bank and credit card account, it should be fairly straightforward to track. You can find some good YouTube videos on the types of income and expense categories to use. 

I would hire a CPA to do your taxes as they'll make sure you are filing properly and in a way that's most advantageous for your situation.  

Quote from @Amber C.:

@Kristen Ambrose I think I got it. So bank transfers (draws for the loan) will not be recorded to the WIP account. Only the expenses for the rehab which I am already currently doing?

Yes, that's right. For example, if the lender transferred you $9,750 because the draw was $10,000 and the draw fee was $250, the entry is as follows:

DR. Cash $9,750
DR. WIP $250
CR. Construction Loan $10,000

Agree with Simon and Charles. One thing to consider, if there's a draw fee, that will be booked to the WIP account. 

You can also have multiple WIP accounts for flips if that helps with your tracking. For example:

Flips - Purchase Price

Flips - Acquisition Costs

Flips - Rehab Costs

Flips - Holding Costs

Flips - Selling Costs

Congrats on the triplex purchase! It's definitely a good idea to get in the habit of tracking expenses related to that property separately. I prefer using Quickbooks to do this. This will be really helpful come tax time especially if you have other properties or plan to buy more. 

My property management clients like both Appfolio and Rentmanager. 

I've found the accounting and personal finance courses I took in college to be the most helpful in growing our real estate investing business.