Custom tools for RE Investors: let’s get organized!
Trust me: I know that you hate bookkeeping and taxes. My job is to make your job easier. This is why I created these tools specially for you – a Real Estate Investor. You cannot find anything like that elsewhere – promise! If you want to minimize your taxes and your stress – you need my tools. And some of them are even free!
Tax preparation: once-a-year chore
- List of income tax documents – bring these to me for tax preparation
- RE investor’s Tax Organizer – complete set of custom-designed worksheets
Bookkeeping: day-to-day records
- RE investor’s Introduction to Bookkeeping guide – compact overview of all you need to know
- RE investor’s MoneySaver logbook – simple and effective paper-based system
- Custom QuickBooks systems – full-featured accounting software for RE investors
List of income tax documents
If you hire me to prepare your taxes, I will need your documents. What documents, you ask? Just a copy of your W-2 is not enough. Every receipt from Home Depot is way too much. I prepared a detailed list of what I need – available at no cost. Some examples are:
- All forms that include “1099″ in their names
- Complete annual statements from investment firms
- Forms 1098 from lenders
- HUD-1 (aka “closing” or “settlement”) statements
- Contracts for “kitchen table” closings
- Last two years of tax returns
- and more – so request the complete list
How do you benefit?
- Simple: no documents – no tax return
Cost and ordering
- FREE for asking
- request by e-mail or phone: 713-721-3321
RE Investor’s Tax Organizer
Whether you prepare your taxes yourself or hire a professional like me – you need to organize your numbers. This means sorting expenses by categories, adding them up, and arranging them in some order. If you use accounting software (and use it correctly) – most of the job will be done by computer. The rest of us need worksheets. This is exactly what I designed: a comprehensive list of worksheets, including an extensive list specifically for Real Estate investors like you. No more confusion: you will know exactly what numbers are needed.
My tax organizer has been very popular among Houston investors since 2004. For 2009, I completely redesigned it to include many of your suggestions and make it easier to complete. Samples from the new organizer will be posted soon – current examples are from the old version. Some of the worksheets included in the new package are:
- General business expenses
- Rental property – annual expenses
- New rental property – depreciation
- Rehab & replacements
- Sold rental property
- Flip/resale property
- Business use of automobiles
- and many more …
How do you benefit?
- You will know what data is necessary
- You will not be collecting unnecessary data
- You will save time and avoid back-n-forth
- And – you will pay the least tax possible!
Cost and ordering
- $75 regular price; 40% off SALE until Jan 10th – $45
- cost refunded when you become a client
- order by e-mail or phone: 713-721-3321
Bookkeeping rules for RE investors
It is a classic catch-22: most investors do not understand bookkeping, and most bookkeepers do not understand real estate business. “Aggravating” is a mild way to put it. This unique 5-page document is designed as a bridge between an investor and a bookkeeper. If you keep your books yourself – this guide will help you avoid common mistakes. If you hire a bookkeeper – this will be her desktop reference. This document has more practical information on its 5 pages than you can find in 500-page books. Topics covered:
- Difference between rental and non-rental business
- List of expense categories for RE businesses
- The importance of “placed in service” date
- Refinancing and selling
- Construction and rehabs
- Bookkeeping for automobile expenses
- and much more …
How do you benefit?
- Your bookkeeper will know what to do
- Your books will make sense to your accountant
- You will have less stress
- You will save money
Cost and ordering
- $40 regular price; SPECIAL 2-for-1 offer until Jan. 10th – FREE with MoneySaver logbook
- cost refunded when you become a client
- order by e-mail or phone: 713-721-3321
RE investor’s MoneySaver logbook
If you know me, you know that I prefer to keep things simple – see my “Ten Commandments of Great Bookkeeping” article. Software is powerful and “professional”, but it is often confusing and frustrating. Not to mention that it is not as handy as a notepad. If you prefer the old-fashioned (but still very practical!) “pen & paper” bookkeeping – you cannot find a better tool than my MoneySaver logbook. Why? Because it is designed specifically for Real Estate Investors. It is a perfect companion to my Tax Organizer, it is professionally printed, and it comes in two compatible sizes:
- Full-size – 8.5″ by 11″ pages, book-style – regular “letter” size for your briefcase.
- Compact – 3″ by 8.5″ perforated pages. Perfect for your purse or glove compartment.
There are three main parts in this awesome organizer, plus bonuses:
- Business expenses log, per property
- Auto mileage log, as required by the IRS
- Time log, to prove “RE professional” status
- Summary worksheets to calculate annual totals for taxes
- List of suggested expense categories with explanations and tips
How do you benefit?
- You will not forget to deduct what you spent. It adds up quickly!
- You will know your accurate mileage for maximum deductions
- You will have a bullet-proof defense against the IRS challenge
- You will save a lot of time and money at tax time
Cost and ordering
- $80 list price; ON SALE – $40; $15 for compact version
- SPECIAL 2-for-1 offer until Jan. 10: buy a logbook – get Bookkeeping guide ($40 value) for FREE!
- order by e-mail or phone: 713-721-3321
Custom QuickBooks-based accounting systems
For those of you who are not afraid of debits and credits – a full-featured accounting software is best. This market is dominated by QuickBooks software made by Intuit, Inc. Despite Intuit’s effort to customize QuickBooks for specific industries, they do not have a robust solution for RE investors. As a result, most attempts to use QuickBooks in real estate investing fail miserably – even if you use a professional bookkeeper. It really takes an investor to create an investor-friendly software.
This is why I highly recommend two custom RE accounting systems designed by investors for investors. Both systems are based on QuickBooks and require that you buy a copy of QuickBooks and learn how to use it. Both authors are my friends, and you can purchase their systems through me.
- “The Creative Real Estate Investor’s Guide to Bookkeeping” by Jerry Yeiter, CPA. Designed for an experienced investor in mind, the system covers a variety of advanced investment techniques. It includes custom chart of accounts and sample files on a companion CD, as well as a great bonus: Microsoft Excel-based cash flow model.
- “The Real Estate Investor’s KISS Guide to Bookkeeping” by John Hyre, attorney. John’s is another popular and well-designed customization of QuickBooks. Beginner investors will find it easier to implement than Jerry’s – but it is also less comprehensive in coverage. The book also comes with a CD and a custom chart of accounts specifically for investors.
How do you benefit?
- You can have a professional bookkeeping fit for your RE business
- Your books will be usable to your accountant
- You can produce financial statements and other reports
- Your frustration from dealing with QuickBooks will be minimized
Also written by John Hyre: “The Real Estate Investor’s KISS Guide to Entities.”
Any time more than two investors get together, they will start arguing about business entities. What is better – a partnership or a corporation, an LP or an LLC, a C-Corporation or an S-Corporation, etc. Why argue, when you can buy this outstanding book and get the real answers from an extremely competent professional? The guide is very thorough: you will probably learn more than you care to know on the subject. But you will be able to make an informed decision – unlike most of your fellow investors. The best feature is that the book comes with a CD containing all necessary forms to create whichever entity you choose – all customized for our local Texas law. Just fill in the blanks, and you’re set.
Cost and ordering
- $279 for Jerry Yeiter’s manual
- $295 for each of John Hyre’s manuals ($495 for both)
- order by e-mail or phone: 713-721-3321
- you can preview these manuals in my office prior to purchase
Sample fragments from Tax Organizer & Deduction Finder
Expense categories for a rental property
Each property should have separate set of numbers for expenses. Most categories of expenses require just one number: annual total. In the example below, “utilities” and “supplies” are two such categories. Certain expenses, usually “big ticket” items, must be listed separately. My organizer includes over 20 categories for rental property expenses.
Automobile expenses worksheet
Everybody knows that auto mileage is a tax deduction. Count your business miles and multiply by approximately 50 cents (the exact number changes every year). Right? Not necessarily. There is a different method of deducting auto expenses, sometimes giving you several thousands extra! To do this alternative calculation, you will need all the information asked in the example below.
Advanced depreciation worksheet
Most investors do not appreciate depreciation. Think again! Depreciation is one of the most powerful weapons in protecting your money from the IRS. Provided, of course, that you know the tricks of the trade. To get maximum benefits from depreciation, you will need to do substantial extra work. The example below will give you an idea of the level of detail that is needed for the best depreciation deduction. Trust me, it will be worth it!
Sample fragments from Bookkeeping Organizer & Logbook
Ongoing business expenses
Let’s keep it simple, folks. Here is all the information that is required: when, to whom, for what, and how much. If you look at the example below, this is exactly what is being recorded in the expense log. There are some optional, but very helpful, features: expenses are kept separate by property; you can record the method of payment; and you can assign tax-reporting categories to each expense. For your convenience, categories are listed at the bottom of each page.
Business mileage log
In order to claim a deduction for driving, you must have a mileage log. You are not required to send it to the IRS unless they ask for it. So why not be prepared? Besides, once you start counting, you will realize that you drve more than you thought -I promise!
Time log
There may be good reasons to keep track of your time. One is to explain your husband why you are never home. Another is to explain the IRS why you would qualify for a very beneficial status called “real estate professional.” For this status, you do not need to have a realtor license, but you do need to show how much time you spend in your business. Look, I even included cartoons to make your recordkeeping as easy as possible!
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