All Forum Posts by: Account Closed

I know the 36th District Court very well and how it operates. 

Charging for clean up will be tossed out  of court unless you have photo's of furniture left behind and 40 bags of trash.  I don't care how dirty the walls are or the tub is, or  the stove or floor.  Too bad so sad for us landlords.  I have a blog on here somewhere showing all my carpeting and floors after move out.  Disgraceful, but that's being part of a landlord. 

Carpet replacement:  Do you have photo's.   Stained by bleach, embedded oil stains, red pop?   Usually depreciation of carpeting is a percentage each year to be deducted from the price of the carpet when you purchased it.   But usually tossed out unless you have the above damages.

Mowing the grass:  That's part of getting the property ready after move out.  Unless it looked like a jungle and handn't been cut in 6 months, tossed out.  

New landlords have a tendency to want to charge for everything, and even though I think we should be able to, the courts feel differently.  I was taken to court one time because the grass in the alley behind the house was over 1 1/2 inches high.  $3600.00 fine.  I fought it in court and won...but just barely.  36th District Court.  

So the holes in the walls (which would only take a few patches according to your photo's may be allotted to you, but since they are small holes, I doubt it will stand up in court.

Also do you have a C of O  (Certificate of Occupancy)  If not you won't win no matter how much proof you have.  And believe me, tenants check this out before going to court.  

Eat the $180 unless you want to spend ALL DAY IN COURT and chaulk it up to a college education in Landlordling.  Really.....that's how we learn and adjust to the real facts of being a landlord.

Nancy Neville

I started to write this post before Bill wrote his and have to laugh because he is an accountant and talks like an accountant, he even made my eyes go glassy.  (My own CPA makes my eyes go glassy...which is a a form of flattery to all Accountants because they sure know their stuff)  But to the normal Joe ya have to talk like a Landlord and not as an accountant.  So here is what I wrote before Bill posted.

First of all, personally, I would setup my business with each LLC having their own company file and each LLC having their own bank account. That's just me. Most of the people I talk to about QuickBooks who have various LLC's fight me tooth and nail regarding them setting up their company files as I recommend them to do. Somehow they just hate to click on File and previous company file to go back and forth to each company.

With that said and done, they ask me if they can merge their LLC's into one company and I say yes you can, but make each LLC a Class and each property that belongs to that LLC as a subclass.

Then do the same thing with the bank account.

You have your Major Bank, list Each LLC as a sub bank.

When you get your bank statement back, it will list the bank total and your deposit and expenses.  

Since your Bank Account is the Header and the LLC's are a sub account of the bank, all their deposits and expenses are going to appear as one bank, because it is one bank. You just are listing different deposits and expenses that make up that bank statement, but assigning them to various sub accounts, various LLC's.

When you reconcile your bank account, do it as normal reconciliation  in QuickBooks and choose the deposits and withdrawals that match each other.  Bank Statement with QuickBooks Statement

It's the same concept as having Security Deposits from various tenants put into a Security Trust Fund Account.  One Bank Account, various security deposits. 

When you get your statement from the bank for the Security Deposits it will list all your deposits, and you just match those deposits with the deposits that appear in your Security Deposit list.  

SECURITY DEPOSIT TRUST FUND ACCOUNT..................................Total $3,000.00

       Barbara Rose:  $750.00

       Candy Cane:    $1050...

      Benjamin Franklin:   $1200.00

LLC MANAGEMENT COMPANY..........................................................Total $10,500.00

Town and Country Rentals LLC............................$3,000.00

Reliable Properties LLC.........................................$5,000.00

Sunrise Apartments LLC............................................$2500.00

When you make a deposit, the deposits reflect the entries that you assign to each LLC

As you can see the main bank has the all the deposits you made per LLC as one total. When you make the deposits the deposit slip will list each deposit made with the total of all deposits.

It's like working for a utility company and everyone makes a payment by check.  You take their checks and enter them on the deposit slip, go to the bank with one big deposit, that lists all the checks that make up the deposit.  (Haven't you been to a bank and were so lucky to stand behind a company depositing all their checks into their account?  Long time standing !!

This is no different than a company taking all their checks to the bank and making a deposit. You list the LLC Deposits as a list and use the total as the deposit total.

The same thing with your expenses. You write a check for the expense choosing the sub bank account that belongs to that LLC the expense is from and it will deduct the total of that LLC's bank balance as well as the main bank total.

Hope this helps. 

Nancy Neville

A lawyer is not needed on how to use QuickBooks.  A lawyer would say to you, well I don't know how to use QuickBooks, I'm a lawyer. 

As I said, if YOU are filing your taxes, YOU better have everything correct in QuickBooks.  That goes from the Schedule E's to the S corporations, etc.,  You better know what your doing.  Because it's the paperwork that you send to the IRS that either gets you in trouble or not.  That's why we hire a CPA or an Accountant, because they know the laws on what the IRS expects and wants to see from us.  They are the ones that fill out the IRS paperwork, not QuickBooks. QuickBooks just helps us give them the information, but it doesn't give us the forms to fill out. 

True there are laws that say you can't comingle monies and mix personal stuff with your business stuff.  This should be a common sense theory.  However, most people don't consider anything wrong with doing that, especially property managesr and is why I no longer teach Property Managers how to use QuickBooks.  They do absolutely everything wrong in QuickBooks. (Most of them, not everyone)

So if one does plan to do their taxes themselves, this is where they need to contact an attorney, but a Real Estate/IRS  Attorney to understand the legal stuff that needs to be done via the paperwork to be sent to the IRS

Property Managers who manager other people's properties most definitely need to setup their clients in their own company files. But if we, as one person, are the only owner of all the LLC's we have, then we can list each LLC as a class. We can have one bank account with each LLC as a sub bank, because this is our money. Not several different people's money, and because we have an accountant or CPA doing our taxes. So this is okay to do. The only ramification is that you better be careful when assigning transactions. Therefore I'd rather have separate company files for each LLC. But it's not illegal to do this in one company file, especially when we own all of them ourselves.

I hope I am explaining myself as to the differences of using QuickBooks for our information and giving that info to our CPA verses doing our taxes ourselves.  

QuickBooks however, wraps everything up in a tidy fashion.  And since CPA's charge you by the hour, the less work the CPA has to do, the less money you have to pay them.  

Nancy Neville

The online Version that has the Class Feature is about $39.99 a month. (So that's $479.88 a year) Whereas the Desktop Version that has everything you need is a one time fee.

As a person who prefers to list all my LLC's in their own company file, just because it is the proper way to do things, I do understand that others, like yourself, want to do it in one comany file. And that was your question, can you. And the answer was yes you can. But by doing it in one company file, you will have to really focus on what transactions belong to what LLC.

So...some stuff to think about.  The proper way?  or a "making do way"?

Nancy

Dawn, your check is in the mail.  (smiling) 

Okay this is the scoop.  

If YOU are doing your own taxes, you would have to enter all your LLC's as a separate company. However, I don't know of any investor/landlords who do their own taxes. Instead we give our data from QuickBooks, via our Profit and Loss Reports and Balance Sheets to our Accountant or CPA.

The reason behind having a separate company file for each LLC, is because each LLC has a different company name. But because we have our accountant filing the actual tax returns for us, all they need is the information from us regarding our company(s) and they do the rest. That's why we pay them the big bucks.

So this is how you can setup all your LLC's in One Company File. You will list each LLC as a class. But you will have to make sure you link every transaction that pertains to that LLC to that LLC. So this means you have to focus on what you are doing when you do stuff like this.  

Then when you need to see what your Profit and Loss is on each LLC, you just run a Profit and Loss Report by Class. (which of course is your LLC, and list each property that this LLC has, as a sub class)

Once again this method is only if you are not doing your taxes yourself, but are giving your data from QuickBooks to your accountant.

A lot of times we worry about entering our data into QuickBooks like an accountant.  However, most of us (if not all) buy QuickBooks for our use only, and use the Reports, or back up copy to give to our accountant or someone else.  And I think this is why the big hangup on why some people find QuickBooks intimidating. We feel we have to do everything according to Accounting 103.  

For example, professionally, we should assign each transaction as a Schedule E, and get into all that big heavy duty stuff using Schedules and depreciating, etc.   But because we turn over our data to an accountant, they do all this for us. All we want to know is where we stand financially and who owes us rent, who is late, and pay our bills, and then see if we have money left over to buy some more.  The accountant is left to deal with the big guys, the IRS.  

So, I hope I have helped you in making your life as an investor a little bit better when it comes to QuickBooks.

Nancy Neville.

They didn't leave and therefore they owe you rent for the time they still remained in your home.  Since YOU gave them the notice and not them, and they stayed past the notice 21 days, you may have to Pro-Rate the rent for those 21 days, and if no other money owed, send them the balance of their Security Deposit, if there is a balance left to send them.

Nancy Neville

My husband and I owned many multi-families that were all on one meter.  We included the utilities in the price of the rent.  

Whenever the utilities were higher than normal our tenants would receive this letter.

Dear (tenant's name)

Today I received the utility bill for this building and see that there has been quite a hike in the amount of the bill for  usage that we are used too.  Therefore, please be advised that if next month's bill is also higher than normal, we will be forced to raise everyones  rents by $25 per month to cover the now higher cost of utilities.

Sincerely,

(This way you are not targeting any one individual, because you don't really know who it is.  And nobody wants their rents to increase by $25 a month so they will be watching what they do.  If you have a new tenant move in and all of a sudden the bill increased, then you can pretty much guess who is the culprit and perhaps send them the letter and not the others.  But since you can't prove it 100%, one way or the other, it's best to send the letter to everyone and let your long time tenants know that you have to send them this letter because you have to send it to all of them.  That helps relieve the "It's not me" calls to your office. )

The reason we didn't install separate meters was because the cost was outrageous and I kept everything under control by my letter writings.  Just too much of a hassel.

Nancy Neville

A Notice to Quit is a notice of non-payment of rent or money owed to you.  

A Termination of Tenancy is a notice that you are terminating the tenants lease and not renewing it. 

The unauthorized occupant has paid Septembers rent, therefore you cannot "Evict" him or her because they are paid in full.  (When no lease agreement is signed, they are considered a month to month tenant) 

If you no longer want this person in your home, you must send him or her a Termination of Tenancy and it must be sent according to your state laws regarding how many days it must be sent, etc., etc., to terminat a tenant and not renew their lease. (Always check your state laws regarding the eviction process and termination of tenancy)

In Michigan we must serve a Termination of Tenancy (on a M-T-M Lease Agreement) with a FULL 30 day notice.  Meaning a FULL One month notice before we can file the Notice in a court of law if they don't move.

If you keep accepting payments from this person they are considered a M-T-M  tenant and you will have to terminate their tenancy with you if you want them out.  Or, a  Notice to Quit,  if they don't pay their rent.  

No, you will not be returning any money back to this person, because you cannot evict this person TODAY.  Follow the laws, and you will be okay.

Nancy Neville

Remember that doing an eviction is to regain POSSESSION of the home.  (not just getting money)  Once that tenant has POSSESSION of the home, it will take a court of law to get them out.

Watch PACIFIC HEIGHTS THE MOVIE!!   Warning, this movie is not for the landlord who is weak of heart!   I still sweat when I see that movie. 

Nancy Neville

If in doubt get a "Co-signer".  They must qualify with the same criteria that is used on the original applicant. 

Nancy Neville