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Is there any guide out there for QB real estate bookkeeping?

I am a bookkeeper and would like to know that I'm booking things right in QB for the real estate industry. Is there any practical guide out there which will show me how to:

  1. book sale and purchase HUD
  2. book property tax payments (possibly from escrow account)
  3. Booking refinances
  4. Booking construction loans and keeping track of the amounts drawn and still available.
  5. Rehab: capital improvement vs. repairs and maintenance
  6. mortgage checks (applying payment to escrow, principal interest etc)
  7. Book loans- incoming and outgoing
  8. Partnerships- contributions and draws.
Best answer 12-10-2018 09:55 PM

Accepted Solutions
Super Explorer **

There is a book on Amazon by Gita Faust.  She is consider...

There is a book on Amazon by Gita Faust.  She is considered the R/E guru. Not sure if she has a new book, but it is a guide. 

Here is a good free link to guide you:  https://community.intuit.com/articles/1502157-create-a-property-management-company

I know you are using desktop, but if you were thinking about qbo, Seth David is a great source of info. He has a ton of you tub videos and some paid programs.

Good luck!

7 Comments
Super Explorer **

There is a book on Amazon by Gita Faust.  She is consider...

There is a book on Amazon by Gita Faust.  She is considered the R/E guru. Not sure if she has a new book, but it is a guide. 

Here is a good free link to guide you:  https://community.intuit.com/articles/1502157-create-a-property-management-company

I know you are using desktop, but if you were thinking about qbo, Seth David is a great source of info. He has a ton of you tub videos and some paid programs.

Good luck!

Experienced Member

Re: Is there any guide out there for QB real estate bookkeeping?

I would also suggest that you not use QuickBooks online. Horrorific edition truly! I have 34 years of QuickBooks experience all the way back to dos, I suggest desktop. I have many clients that are property managers and real estate companies, and we have 450 clients  on desktop, only 2 on online and we are in the middle of converting them to the desktop. 

Active Member

Re: Is there any guide out there for QB real estate bookkeeping?

Hi, 

Do you use QB pro or pro plus? Pro plus is subscription based. I like the features for backup and auto upgrade. But my company is small and is it worthy to pay for accounting software each year? Thanks!

 

Experienced Member

Re: Is there any guide out there for QB real estate bookkeeping?


@MargauxInDenver wrote:

I would also suggest that you not use QuickBooks online. Horrorific edition truly! I have 34 years of QuickBooks experience all the way back to dos, I suggest desktop. I have many clients that are property managers and real estate companies, and we have 450 clients  on desktop, only 2 on online and we are in the middle of converting them to the desktop. 


Margaux, I sooo agree with you.  Made the mistake of allowing a bookkeeping service I was using (fired them), switch me to QB Online.  Horrendous.  We purchase, rent (traditional and short-term), renovate, run Airbnb's, provide short-term financing to other small investors, etc. and even though I initially set up QB (after a few workshops), I retained them to clean up a lot of things.  What was set up was too complex for them as I also did a 1031 Exchange and had a lot of other things going on.  I am now converting back to QB Desktop for both of our real estate LLC's and am taking courses to become QB Certified in addition to managing our real estate business with my husband.

 

Our industry is unique to any other QB type business and I find that there is too much generalization that goes on.  One has to know or get to understand the various nuances of Real Estate Investors and their properties or assets and how they are handled.  Because of this lack of QB knowledge and expertise, I've had to take this route to become as knowledgeable as possible.  

 

So to the initial poster..... please by all means make sure that you get to know and understand ALL the activities that your real estate client is involved in, even if this means having numerous conversations with them.  It will pay off in the long term.  And yes, Gita Faust is fantastic!  We've have spoken on several occasions and as someone who was in the real estate business, she intimately knows what we need and can certainly be of help through her materials to you.  All the best to you!

Experienced Member

Re: Is there any guide out there for QB real estate bookkeeping?

I am currently on Desktop as well, and we do not use other Property Management Software.

QB Desktop is managed offsite from the Property we manage.

 

Do you have a solution to permit a Property Manager to be able to enter on-site rental payments into QB Desktop, without providing access to the entire program? 

 

This appears to be the downside of Desktop. With QBO, there are 3rd party vendors that can integrate with the Online version for specific tasks. It is my understanding that integrating with the QBO version is much more practical. 

 

I've only found a couple of integrations that can Sync with Desktop, and the reviews are very mixed leaving me concerned with my valuable data.

 

We need to be able to transfer this time-consuming task to the  Property Manager.

 

Stay with Desktop, or deal with the learning curve of QBO and add an integration partner? 

 

Any suggestions would be appreciated. 

 

Thanks in Advance. 

 

QuickBooks Team

Re: Is there any guide out there for QB real estate bookkeeping?

Hi @vdifronzo,

 

The option to allow your Property Manager to only enter payments in QuickBooks is currently not available.

 

But I have another option for you. You can apply for a QuickBooks Payment account. With this, you can accept credit card or ACH payments which will then sync automatically once connected.

 

Here's how you can apply for QuickBooks Payments:

  1. Click on Customers from the menu bar.
  2. Select Add Credit Card Processing.
  3. Complete the online form to submit your payments account application to us.

Don't hesitate to let me know how this goes. I'll be here in the Community to assist you.

Experienced Member

Re: Is there any guide out there for QB real estate bookkeeping?

Hi Community, 

I've too tried desperately to find help in entering a real estate closing into QuickBooks, and after a lot of research I would like to offer the solution I used to enter the closing accounting. I believe this is a unique approach to the problem, but it works, and I could actually understand the process - I'm not a trained accountant.  


- Instead of using a Journal Entry (Which still confuses me) I used the Fixed Asset account for the purchased property to list the details of the closing costs. You'll see where the unique aspect comes into play when you enter the closing statement details.


So here's what I did.

1. Setup your real estate ASSET and EQUITY Capital Investment accounts. Here was the situation when I created my real estate company in QuickBooks:

- I had not incorporated yet
- I had not created my bank account yet

1A. Create an EQUITY account called "Owner Capital Investment". This is where I entered the earnest money check I wrote to the realtor. Since I didn't have a business checking account yet, my personal check amounts to a capital investment (Or Business  Loan)  to my business.

1B. Create a FIXED ASSET account with the address of the property - I named mine "120 W Silver Ave". Then create sub accounts under the ASSET account called "Land", "Building" and "Accumulated Depreciation".

This was enough to get started. 

2. I Entered the Earnest Money Check. Since I didn't have a business account yet, this was a personal check I wrote to the realtor. So I entered this "investment" into the "Owner Capital Investment" EQUITY account as follows:

 2A. Open the register for the property FIXED ASSET Account  "120 W Silver Ave:Building"

2B. Enter the amount of the earnest money in the "Increase" Column, and use the account "Owner Capital Investment". "Increase" - Since the earnest money will contribute to the purchase price of the property.

3. File Incorporation and setup a Business Checking Account if you haven't already. I put the funds for the closing into the business checking account prior to closing, so I could write the final check at closing from the business checking account. 

4. After the closing, take the HUD-1 Closing Statement and enter the following into the Building Fixed Asset Register:

4A. Enter all CREDITS from the closing statement as "Increases" in the building register. The earnest deposit amount should already be in the register. These entries were:

- Deposit, Loan Financing Amount and any other amounts I received from the seller.

4B. Enter all DEBITS from the closing statement as "Decreases" in the building register. These were:

- Closing, Recording and Transfer Fees, Title Insurance, any prorated utilities I needed to pay for, Survey, and the first loan payment (interest only). 

4C. You will need to create the appropriate expense (and Liability if you got financing)  accounts as you go along the closing statement. Here are the expense accounts I created for my closing:

- [EXPENSE] Real Estate Taxes (For any prorated real estate taxes)

- [EXPENSE] Closing Fees  (For Closing Fee, Filing Fee, Recording Fees, Transfer Tax, etc) 

- [EXPENSE] Title Insurance (I created under "Insurance" parent account)

- [EXPENSE] Utilities ( I created subaccounts Propane, Water & Sewer, etc)

You probably have a loan as part of the transaction, so I created accounts for the loan P & I - 

- [LONG TERM LIABILITY]  (i.e. "120 W Silver Ave - Loan")

- [EXPENSE]  (i.e. "120 W Silver Ave - Loan Interest")

 As part of the closing I pre-paid the first month interest-only payment so I entered that amount as a Debit/Decrease and specified the Loan Interest expense account. 

 

The trick to this approach of using the building asset account to enter the closing information is that you can't enter the purchase price of the building itself in the building register. Since you are entering into the building ASSET account when you enter the purchase price from the closing paperwork, QuickBooks will warn you that you are making an entry into the register and using the SAME account to post the entry - SO, DO NOT ENTER THE PURCHASE PRICE into the register, just enter everything else from closing. What you should find is that after all Credits and Debits are entered into the building account, you should be left with a balance in the register equal to the purchase price of the property, which is the BASIS Value you want in the register! 


5. You should finally make an adjustment and move the appropriate amount from the building account to the "Land" account, since Land is not depreciable. For example you might transfer $20,000 or so into the Land account. The real estate tax bill will have an assessment for the value of the land, but that is not always an accurate figure. 

 

Hope this helps! 
Cheers 

AC