All Forum Posts by: Max Emory

Hey @Justin Johnson, I see this was 5 years ago, but there have been some recent replies so your question popped up for me...

I'm curious what you ended up going with?

I'll weigh in. This will depend on your entity structure. If you have each property in its own entity, I would have 1 checking per entity. I'm a fan of profit first so I like to have the profit first accounts at the holding company level.

As long as each entity that holds property is "disregarded" for tax purposes, I like to hold credit cards at the holding company level as well.

But, for me at least, it all starts with the entity structure.

Since you don't have any entities right now, I would probably have a checking per property if you have 5 properties or less just to make things easier on you as you're just getting started with the REI game. 1 less thing to worry about keeping straight.

Once you grow, you'll need to implement systems and processes that allow you to keep up with each property's transactions without having a separate account per property. No one wants 100 bank accounts.

Hope that helps a little as I'm 5 years late haha.

Happy to help more if you're still having issues with this.

Hey @Lisa Kinman, glad you guys are making money on it now!

And, yes, retirement accounts are tricky in that way. Also, all the hidden fees and penalties.

@Grant Rogers, I'll DM you the list our bookkeeping firm recommends. One of them is in this thread...

Hey @Zach Logan, if you want to track rentals with QBO you'll need the QBO Plus subscription. Then, you can use the class feature or customer feature to track each individual rental. If you have multiple entities, I recommend using the location/business feature to track each "disregarded" entity within 1 QBO.

Bookkeeping for REI companies (especially rental property companies) is super nuanced. For example, for rental properties, lots of the categorization depends on the REI's specific tax strategy regarding what we're capitalizing versus what we're immediately deducting. It's heavily dependent on what the tax code allows and who is interpreting the tax code. There's room for flexibility depending on the desired tax strategy.

We use QuickBooks Online exclusively for all of our REI Clients. I use it for my personal portfolio as well. We've found it has superior reporting features, integration features, and is overall more efficient to work within than other REI-specific software.

The downside is QBO is not set up for REI so you'll need to do that or work with an expert to ensure it is set up for your business appropriately. That's the key component that is usually missing when I hear other entrepreneurs/investors say they don't like QBO.

Something else to keep in mind is your entity structure and how your entities file tax returns. As a general rule, each entity that files a separate tax return (partnership, s-corp, c-corp, etc) will need its own QBO subscription. If entities are disregarded, you can keep up with more than 1 in a single QBO account using the location/business feature to keep track of them separately. This will save you on subscription costs.

If you want to discuss any of this further, I'm happy to answer questions and help walk you through it.

Oh, our FB group "Bookkeepers for Real Estate Investors" may be helpful to you as well. It's all about this stuff and active daily.

Best of luck!

@Chris F., @Lauren Robins is spot on. And, if there is absolutely nothing indicating which charge from the utility company is associated with each property, we've had luck in the past contacting the utility company and asking them to structure things differently so we can tell what is what. 

Each utility company operates differently so it's key to ask them "how" we can accomplish what we're trying to accomplish rather than asking them if they can change something super specific that may not fit their system or processes.

Once you have this figured out, then you can automate this month to month using software as long as what comes from the utility company is consistent every month.

@Chris Seveney, this is another reason we recommend QBO. Any tax pro that exists is familiar with QBO unless they're still working with pen and paper.

Great tips, @Carlos Gonzalez. That daily log and budget tracker are huge!

Most of our house flipping bookkeeping clients have a version of these and it's super helpful for everyone involved to know what's going on with each project. Our landlords who do lots of renovations usually have these too.

Super helpful to us as their bookkeeping service provider so we can cross-reference their trackers and logs with what comes through their bank accounts and credit cards.

This not only helps us with categorizations, but we also catch mistakes and discrepancies constantly between what they report and their actual transactions. This helps them avoid miscalculating the profitability of each deal.

Again, great tips!

Hey @Massiel Pezzino, I'll speak to the bookkeeping side of this. It really depends on your cash flow, area of expertise, and how you want to spend your time.

For our clients, they make much more money having us do their books because they consistently have the financial clarity they need to make big decisions for their business, the next deal, etc. This mixed with us saving them a ton of time every month is a potent combo for them.

For others who may not have the cash flow to hire or maybe they have an accounting background and enjoy doing bookkeeping, hiring us may not make sense for them.

Regarding the tax side of REI, get an REI-savvy CPA/tax pro as soon as possible. I hired my first REI-savvy tax pro after purchasing my first duplex and they saved me way more money than I ever paid them. This is almost always the case with good tax professionals in the real estate space.

Hope that helps!

Welcome, @Kathy T. Rhoads!! I'm a big fan of househacking as well. Love that model. On our 2nd one now (seller financed) and have done small multi-family BRRRRs and a little private lending.

100% of our bookkeeping firm clients are real estate investors. It's always nice to see more pop up in the forums!

We have a great FB group called "Bookkeepers for Real Estate Investors". It could be some good networking and support for you.

Let me know if I can ever be of use to you. Rooting for you!

Love this, @Kathy T. Rhoads! This caught my eye because the subject of your post is literally the title of the course I created haha.

We have a FB group called "Bookkeepers for Real Estate Investors" that you may find helpful.

Cheers!