Real Estate Accounting- Flips on your P&L or Balance Sheet? (Part 2)
In this episode, Nick Baldo covers various aspects of real estate investing and bookkeeping. He discusses managing transactions, tracking rehab expenses, preparing for property sale, and accounting for selling costs. Nick also simplifies recording of sales and explores balance sheet and P&L transfers. The episode concludes with a mention of Income Digs courses and resources.
Key Points
- Real estate investors can use QuickBooks to track the profit and loss of a property flip by transferring financials from the P&L to the balance sheet and then back to the P&L upon sale, ensuring accurate representation of the business's financial health.
- When selling a flipped property, it is important to zero out the flips in progress on the balance sheet by crediting the buying costs, purchase price, holding costs, rehab costs, and debt service to reflect that the property is no longer owned.
- Investors have the option to keep track of all flip-related expenses on the P&L throughout the project's life for simplicity, or to use the balance sheet for a more detailed view, which can be discussed with a CPA to align with tax preparation strategies.
End-to-End Accounting Course: https://www.incomedigs.com/reab (Enter Code YOUTUBE50 for $50 off!) Free QBO MiniCamp: https://bit.ly/3uNlesQ Free Download: https://www.incomedigs.com/chart-of-accounts Website: http://www.incomedigs.com
Watch Part 1: https://www.youtube.com/watch?v=aRL1MDYFMZ4&t=0s
We continue with our previous example and eventually sell the property to get it off our books.
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Transcript
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