The document provides an overview of common real estate terms related to fixing and flipping properties or buying and holding rental properties. It also reviews how to record the purchase and sale of fix and flip properties through journal entries using HUD settlement statements. Sample journal entries are shown to properly record fixing and flipping income and closing costs associated with real estate transactions.
The document provides an overview of common real estate terms related to fixing and flipping properties or buying and holding rental properties. It also reviews how to record the purchase and sale of fix and flip properties through journal entries using HUD settlement statements. Sample journal entries are shown to properly record fixing and flipping income and closing costs associated with real estate transactions.
The document provides an overview of common real estate terms related to fixing and flipping properties or buying and holding rental properties. It also reviews how to record the purchase and sale of fix and flip properties through journal entries using HUD settlement statements. Sample journal entries are shown to properly record fixing and flipping income and closing costs associated with real estate transactions.
OBJECTIVES At the end of this training session, you will be able to:
● Understand common Real Estate terms
● Journalize Purchase Hud Statement ● Compute for Flipping Income (RE Income) ● Journalize a Closing/Settlement Hud Statement INTRODUCTION TO REAL ESTATE INVESTING TERMS Fix & Flip - Purchasing a distress property, renovating it, then selling it at a profit. (other current asset) Buy & Hold - Buying a property with the intention of keeping it as a rental property. (Fixed asset) Rehab - The process of “fixing” a property to increase its value. Earnest Deposit - Money given to the title company to show intent on following through with the deal (Escrow Deposit/Advance Payment). Lead Generation - Expenses associated with obtaining a “deals”. In real estate, lead generation is the way you source potential buyers and sellers for real estate transactions. SAMPLE HUD STATEMENT Deals - Obtaining a new property for the purpose of wholesale, fix & flip or buy & hold. Closing - When the “deal” is finalized. Title Company - Also your closing or settlement agent where most real estate transactions take place, documents are recorded, and money is wired to close deals. Assignment Fee - A monetary compensation awarded to the wholesaler for connecting the original seller with the end buyer. Wholesale - Finding discounted and/or distress properties and selling the contract to a cash buyer for the purpose of receiving an “assignment fee”. RECORDING FIX & FLIP Reminders ● The date in your JE should match the date in your QuickBooks banking transaction. ● New policy is to record all expenses associated in obtaining the property under “Closing Cost” (HOA fees, title/assignment/recording fees etc.). ● Use account type “other current asset” for fix & flip and “fixed asset” for rental property. ● Make sure to put a “description” and “class” in making your journal entry. ● Double-check if the amount in your hud statement is the same as the total amount in your journal entry. ● Always hit “save & close” to record your entry. Private Money Lender - A business or individuals that lend their own capital to other investors or professionally managed real estate funds while securing said loan with a mortgage against real estate. Hud Statements - Also known as closing/settlement statements is a document that list all charges and credits to the buyer and to the seller in a real estate settlement, or all the charges in a mortgage refinance. Types of Hud Statements - 1. Purchase Hud Statement 2. Sales Hud Statement or Closing Statement 1099 Contractors ● Independent contractors are not employees, nor are they eligible for employee benefits. They do not have taxes withheld from their paychecks but instead must pay estimated income taxes in advance through quarterly payments. ● Form 1099 is used to report certain types of non-employment income to the IRS. ● Anyone that receives untaxed income over $600 in one calendar year, we are required to issue them a 1099. We can only issue a 1099 if we have a w9 on file. HOW TO RECORD FIX & FLIP FLIPPING INCOME CLOSING/SETTLEMENT HUD STATEMENT JOURNAL ENTRY BOOKKEEPING REMINDERS ● Log in at least 5 minutes before your scheduled time in. ● Greet and inform your clients that you are about to start your work. ● Always “update” your banking feeds at least twice a day. ● Submit an End of Day report to CSM and clients at the end of your shift. ● Review and submit Profit & Loss report weekly. ● Request a copy of Bank & Credit Card Statements 1-2 days following the month for your monthly reconciliation. ● Review and submit Profit & Loss, Balance Sheet and Statement of Cash Flow monthly. TYPICAL DAY OF A BOOKKEEPER TRANSACTIONS & CATEGORY
Note: Category may vary depending on your clients preference.
Note: Category may vary depending on your clients preference. SAMPLE REAL ESTATE TRANSACTIONS SAMPLE REAL ESTATE TRANSACTIONS SAMPLE REAL ESTATE TRANSACTIONS YOUR SUCCESS, OUR PASSION
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