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95: Real Estate Investor Bookkeeping Mistakes

Home » Blog » Real Estate Investing Podcast » 95: Real Estate Investor Bookkeeping Mistakes

Kirk and Joni Yates

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Joni Yates
Joni has an extensive career in administration working with Fortune 500 companies and small businesses alike.  Her career has spanned sectors including retail, automotive, and the legal field.  She has been working with Quickbooks for 7 years.  Joni has helped several companies start their Quickbooks bookkeeping accounts from the ground up.  Joni holds a Bachelor’s degree in Counseling Psychology from Rochester College.
Kirk Yates
Kirk has worked for Fortune 500 companies and run small businesses.  His expertise includes sales management, the automotive aftermarket, mortgages, and banking.  He first worked with Quickbooks in 2001 and prior to that worked with Peachtree Accounting software.  Kirk is skilled in P&L and financial projections.  He holds a Bachelor’s degree in Advertising from Bradley University and a MBA from Walsh College.
Joni and Kirk live in Rochester Hills, MI with their two children.  Together they have owned rental properties and know all too well, the ups and downs of being landlords.

Together, Joni and Kirk got in to bookkeeping for real estate investors when Joni did consulting work for Mike Simmons and his partner. When they were looking over the books, Joni and Kirk noticed that there was a hole in market because there aren’t many people doing bookkeeping for real estate investors.

The biggest mistakes Joni and Kirk see when it comes to bookkeeping for real estate investors are these:

  1. Not keeping track of small transactions
  2. Not keeping receipts
  3. Not categorizing transactions

The reason Joni and Kirk use Quick Books is because it helps keep everything organized for their clients. Quick Books makes it easy to see everything in bookkeeping for real estate investors, so not having any type of system is the worst thing to do for your business. Tracking every single expense will end up costing your business lots of money in the long run.

If you’re in the need of a good bookkeeper, Joni and Kirk are the way to go. The first step is building up a report for your real estate investing business that’s broken down by property so that you know where your money was spent.

“You’re not going to send us too much paper,” Kirk says, half jokingly. The more a real estate investor can provide for them, the better. 6 or so months down the road of working with Joni and Kirk, there won’t be as many questions. The more you two work together, the better their understanding of your business will be, and the more streamline everyone will work together.

Because clients want specific reports, Joni and Kirk keep everything categorized and organized. Want to know where your marketing expenses are? They have reports for that! Knowing where your money is going, and what’s being spent, will help keep your real estate investing business out of bookkeeping trouble.

joni and kirk do bookkeeping for real estate investors


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Danny Johnson: This is Flipping Junkie podcast episode 95. [music] Welcome to the Flipping Junkie podcast. The podcast for flip pilots everywhere. Flip pilots are the house flippers that work more on our business instead of in our business by keeping a 30,000-flip view. You’re now part of a small group of house flippers that considers themselves flip pilots that strive to build the life of financial freedom and time freedom so that we can spend more time doing what we love with who we love. In this podcast, I give you a glimpse of the daily life of a flip pilot so let’s gets started.

Hey, everybody. Welcome back to the Flipping Junkie podcast. It feels like it’s been a while since I’ve had an interview on the podcast. I really enjoy doing this, so I’m excited to get back into doing more of the interviews that you guys love so much and that I enjoy meeting the different investors and talk with different investors across the country. I’m also doing a webinar for online lead generation. I’m going to share exactly how we’ve generated so many motivated seller leads and produced the majority of our deals for house flipping business from our website and showing all of that in this webinar. I hope that you can attend. You can register at or you can just go to Register for that webinar, and I hope that you can attend. It’s going to be great, so go ahead and head over to that. I’m going to be doing that pretty much every week and have the recording going out every week, too. So you can go ahead and register. Even if you’re listening to this several weeks or possibly even months later, we might still be doing that webinar. Check out that page. You’ll find out just by going there, or So I hope you guys could check that out.

Today, we’ve got great guests on the show, Kirk and Joni Yates. They run So they’re going to talk about bookkeeping, the importance of it, and the mistakes that real estate investors make that they see all the time. So you’re going to get some interesting stories and lots of fun from them. And they’ve also provided this awesome guide that you’ll be able to download at the show notes page, and we’ll talk about that at the end of this show. So enjoy this show.

We’re going to talk about bookkeeping now. A lot of people probably don’t have an extreme interest in bookkeeping, but I would venture to say that you do have an interest in finding out what most real estate investors—not most real estate investors but probably a lot of real estate investors—the mistakes that they’re making with their bookkeeping and maybe you’re making these too. And we’re going to discuss those with them today.

Joni Yates. She has an extensive career in administration working with Fortune 500 companies and small businesses. Her career spanned sectors including retail, automotive, and the legal field. She has been working with QuickBooks for 7 years and has helped several companies start their QuickBooks bookkeeping accounts from the ground up. She holds a Bachelor’s degree in Counseling Psychology from Rochester College.

And Kirk has worked for Fortune 500 companies and run small businesses as well. His expertise includes sales management, automotive aftermarket, mortgages, and banking. And he first worked with QuickBooks in 2001. Prior to that, he worked with Peachtree Accounting software. He is skilled in P&L and financial projections and holds a Bachelor’s degree in Advertising from Bradley University and MBA from Walsh College.

They both live in Rochester Hills, Michigan with their two children. And together they’ve owned rental properties and know all too well the ups and downs of being landlords. And today, they’re going to share with us the mistakes that they’ve seen a lot of real estate investors are making with regards to the books. I’m super excited to talk with them. All right. So let’s go ahead and welcome them to the show. Hello, Kirk and Joni? Are you guys there?

Joni Yates: Hi, Danny.

Kirk Yates: We’re here. Hi.

Danny Johnson: I don’t know why I always ask that. I think that’s from when I first got started doing this. Now, we’re on video so I can see you there. So it’s kind of weird that I’m asking if you’re there or not, but welcome to the show.

Kirk Yates: Thank you. Thanks for having us.

Joni Yates: Thanks for having us.

Danny Johnson: So I met Kirk and Joni at Flip Hacking LIVE just recently, and you guys had the table right next to LeadPropeller’s table out there. And so, we didn’t get a whole lot of time to chat. It was a busy, busy, busy event. You guys always had a lot of people at your table talking to you and we had a quite few people on ours, too. It’s really cool. After I heard our mutual friend, Mike Simmons, talking about how awesome you guys are, I just had to talk to you a little bit more. So I wanted to get you on this podcast and share with everybody out there, all the flipping junkies and flip pilots out there listening the importance of bookkeeping, right? And maybe it’s not super exciting. But with what you guys want to share, I think it can be an interesting listen and also sometimes very beneficial because we can find out what those mistakes are that maybe many of us are making that we really shouldn’t be making. So, do you guys want to start with giving sort of a quick background about how you got into providing the service for real estate investors?

Joni Yates: Yeah. Sure. Well, about a couple of years ago, I decided to go back to work. I had stayed at home for several years after our son was born. And I had done QuickBooks for a consulting firm for about six years prior to that. So I was looking for something. I enjoyed bookkeeping, something in that field. And I met these two guys, Mike Simmons and Mike Helper, huge successful real estate investors in our area and started doing their books. Kirk has a mortgage background, so he jumped right in with me because there is so much you have to understand: settlement statements and real estate. It’s very unique.

So we started doing their books and realizing that there was kind of a hole in this market that there’s not a ton of people that do bookkeeping for real estate investors. So about a year ago, our REI was born. We started meeting all these real estate investors through the Mikes’, and it just snowballed and here we are.

Kirk Yates: After meeting them and meeting other people, we decided to focus solely on real estate investors as our customer base and it’s been great ever since. We’ve met a lot of great people.

Danny Johnson: Awesome. And I don’t know if I’ve mentioned it, but, correct is your website?

Joni Yates: Yes.

Danny Johnson: This website, I like it. I was checking it out this morning. I like the way you guys set it up and have it laid out. It’s very clear and easy to understand what you guys provide, so it’s pretty awesome.

Kirk Yates: Thank you.

Danny Johnson: Now, I want to get in to some of the fun stuff. You guys have been doing this for a while, and I want to hear some of the horror stories. So what are some of the things that people have come to you and you’ve been like, “Oh, man. Are you serious?” Do you have any stories like that that you’ll be willing to share? You don’t have to obviously spill out names of who it was. It was probably Mike, but I’m—

Joni Yates: Well, I think a lot of it. We got the late-in-the-year phone calls like, “Oh, I haven’t done anything for the whole year. Can you catch this up? And I don’t have many transactions.” And then, you get in there and there’s thousands.

Kirk Yates: One of the things that comes to us that’s been surprising us is maybe people have tried to start QuickBooks. We use QuickBooks online for all of our clients. So they try to start another type of bookkeeping system. And so when we’re talking to them, they say, “It’s not that hard. I don’t have that much. I don’t have that many expenses. All I do is rent properties.” “Okay.” And we get in there and there’s just hundreds, thousands of things that have not been categorized. And so my first thought is, “Okay. You’re going to lose a lot of money. We got to get this tightened up.” It is interesting. If you don’t do it every day, you don’t realize how much goes into it.

Danny Johnson: And I don’t do it. Thank goodness for Melissa because I don’t know what I would do. I would be one of those people that wouldn’t have it together. She’s been handling all of that and taking care of that thank goodness. So, how many mistakes did you guys want to share? Did you have a list of mistakes that you want to go through that you’ve seen and go through?

Kirk Yates: Yeah. Absolutely. The biggest mistake is not having any bookkeeping at all. I think that with how easy it is to track your checking accounts online and know whether you have money, a lot of times people just don’t do it. Even if they start a plan and after they look at their checkbook and they try to make that gut reaction, “Do I have enough money to pay my yellow books?” So, I think that’s the first one, just not having any type of system. Secondly to that would probably be—

Joni Yates: Not keeping receipts. Tracking every little expense is so important because you’re going to lose money; otherwise, those little trips to Home Depot that you make every week or whatever it is. That’s a huge mistake, not keeping receipts. You want to have those in Quickbooks. We can attach them in there, and that’s sufficient for the IRS. That’s a biggie that people just don’t keep receipts.

Danny Johnson: Do you guys see a lot of people miscategorizing things or not having things structured the right—? I don’t know enough about this. I’d probably have Melissa interview you guys. Miscategorizing things or maybe having things organized very poorly.

Kirk Yates: The great thing about bookkeeping is you can kind of categorize things the way that you want to see it for your business. So a lot of our initial talk with clients is: You need to view your business from a financial standpoint. So that we’re keeping the books and reporting for the business owner to view it. We know we’re going to use proper bookkeeping so it’d be ready for tax time, but a lot of times people—if they’re usually especially a software or an online program and if you don’t take a second to look at it, then—if you miscalculate or miscategorize something that is a marketing expense, well, at the end of the year you can’t go back and get a true idea of how much you spent on marketing. So to your point, we’re very, very aggressive with that plan making sure that we know what is this, where should it go, and keep it properly categorized so that—more so not for tax but for reporting. So you can go back, benchmark, look, set budgets, and know exactly where your money went.

Danny Johnson: I think that’s probably the part, right? It’s not just bookkeeping for taxes sake. It’s bookkeeping for the sake of understanding what’s happening with your business, right?

Joni Yates: Absolutely.

Danny Johnson: So you have clients that kind of tell you like, “I had no idea that this was going on or that this was costing me this much until you guys showed me the report.”?

Kirk Yates: So one of our earlier clients, who will be made nameless—I don’t know. We had six or maybe a month’s worth of receipts on this flip and it was a pretty expensive flip. A lot of contractor builds. A lot of Home Depot receipts. And as we went through it and we started seeing how these numbers were coming together, they were getting to selling it and we kind of knew what price they were putting on it and I almost didn’t want to send them the report. They’re not going to make a lot of money and maybe even lose. So I think that was a little bit of a wild moment for that client that didn’t realize—they knew how much they were paying on the big stuff, but those little things that added up, I don’t think they realized how much they spent on that particular flip. Now, of course we have things in place so they know as they go what to—it’s a big piece of it.

Danny Johnson: That’s huge. I don’t know how many times we—it was probably 100% of the time gone over what the estimates were, but it was always a general idea, right? Like we’ve spent x amount on this. We had this contractor with this agreement, spending about this much. But then, there’s the add-ons and everything, the change orders. And just kind of mentally figuring out how much. And it’s almost always more than what you have calculated in your head for the job. So I could see how that can happen a lot. So, what is the process? I’m curious. And so, maybe this where it’s beneficial that I’m asking the questions because I’m clueless as to most of this. So what is the process? So if I said, “I’m handling it myself. I want you guys to handle it.” How does the reporting happen? How do I see what the books look like? And what are the requests? And how does everything work?

Joni Yates: Well, first of all, we would of course start a QuickBooks account or transfer yours over if you had something going. We need every settlement statement, all the receipts that you have, invoices. If there any loan documents, we make sure that those are in QuickBooks. And we just start literally putting in transaction by transaction and then build it up. And then, we can give you a report. Once we have everything in there, we can give reports for the whole company and we also break it down by property so you can exactly get a P&L for each property.

Kirk Yates: We really work with clients on what’s the best way to get us things like receipts, documents. We use shared drives and we use QuickBooks, apps. There’s about five or six different ways. Every client finds the way that it works. But I always tell people, “You’re not going to send us too much paper. Send us everything. We’ll sort it out. We’ll have it nice and neat.” When we start with a client, we’re typically doing some kind of clean-up. So we may be going back several months, and that actually helps us get to understand their specific business a little bit better. So over that initial 30 to 45 days while we’re cleaning up and setting up their account there’s a ton of questions. And then six months down the road, there’s less questions because we know more and more about how their business looks.

Danny Johnson: So there’s a little bit of that ramp up time where you’re trying to figure out everybody’s specific situation and how they work things. So, how does the reporting work? Do I request a report and then you guys would send it to me? Or is there online access with Quickbooks where I can always see exactly where everything is? How does that work?

Kirk Yates: Yes to all. So we have clients who get into that QuickBooks. Maybe even on a daily basis they like to get in there. We set up custom reports. They hit a button and run it themselves. And we have clients who probably forgot their QuickBooks password. So whenever in that scope somebody fits, we’re going to work with them. So we will make available the monthly P&L balance sheets. We’ll make available the reports every time a property closes, but then there also is a functionality for people to go into QuickBooks themselves and we show them how to get in there and run any report they want.

But a lot of times, clients will want specific reports. A big one is right before Flip Hacking LIVE. Before some of the meetings, a lot of our clients wanted to see their marketing expenses broken out on a monthly basis. So we created reports to pay-per-click, separate an email, and Facebook so we created custom reports for that. And that is helping us with our knowledge. Usually, if one of our clients want something, the other clients are going to want it too. So it helps that we’re kind of in the same industry and all of our clients are looking for the same process.

Danny Johnson: Yeah, it’s a huge benefit. So even if you’re doing it well yourself, maybe you’re not getting the benefit of what other investors—and I’m sure a lot of your clients are probably some of the top level people in the country, right?

Joni Yates: They are, yeah.

Kirk Yates: We’re very blessed. We had a lot of clients on stage at Flip Hack LIVE. We’ve got some great, great clients from all stages, from beginners to very, very seasoned investors. It really helps us a lot with the seasoned investors to see how they look at their business, and that helps us a lot when we’re talking to new clients or maybe younger investors to help show them some reporting that they may have not have thought of to look at.

Danny Johnson: Nice. And I think I just realized to with this recording because we were just talking before this episode that Skype kind of changed the way they did things. And I’m recording the video too for Flipping Junkie’s YouTube channel, for and it’s split screen right now when I see it. And so it’s kind of like half of Kirk’s face and half of Joni’s face in the center. I can see the beautiful view outside, but there you go. If you can lean in just a little bit, that way—That’s great. We’re joking about how the podcast might seem kind of professionally produced at sometimes. I’m sure most of the time it doesn’t. But it’s like figuring this stuff out. Skype changes and then all of the stuff happens. So great. So we can see you better this way. Now, what was the next question I had? The bookkeeping for rental properties, owner financing flips; have you guys handled all that? Do you handle all those different situations?

Kirk Yates: Yeah. As a matter of fact, probably the biggest thing that got us to focus on real estate investing was when we started taking on books for clients even if they had bookkeepers in the past. The real estate and the financing seem to be the biggest area where mistakes were made or simply even not done. We would get into a client’s books, and it’s kind of like this real estate, this settlement statement from six months ago was just out there lingering question that nobody had ever done or we got into them and found that maybe somebody just records how much the check was when they sold up on a property but didn’t get and take into account the settlement statements and the realtor commission, things that seem—

Joni Yates: Or the loan.

Kirk Yates: Or the loan and things that seem simple. It’s not rocket science. But if you don’t do it every day, it’s maybe not as intuitive where to put it in and how to keep it. So we’ve done all of that. We have clients who have 200 rental properties. We have clients who do only wholesaling. We have clients who do only flipping. And we have a lot of clients who do a little bit of everything.

Danny Johnson: Nice. That’s why I really wanted you guys on the show too because we’ve been talking a lot about working more on people’s business instead of in the business. And I think a lot of us feel like we’re saving money and we’re saving the energy of trying to figure it out ourselves and just doing it ourselves, but it’s keeping us from the more important things by getting out there and getting more deals and making sure that the rehabs we’re doing are on time, on budget, and we’re not losing money and not exceeding our budgets and finding out that the profit we make is not what we thought it was going to be because we’re spending times doing these things that’s best left to somebody that focuses on this. And so that’s why it’s really awesome to talk with you all. So do you guys have any kind of further education? Do you guys educate yourselves on the different types of real estate investments just to kind of have a better idea of how that works?

Kirk Yates: Absolutely.

Joni Yates: We do. To that point, just a shout out to Mike Simmons and Mike Helper because they’ve been instrumental in helping us along the way in training us and in certain—financing can be a little tricky sometimes. We listen to podcasts and like going to Flip Hacking LIVE and taking in all we can.

Kirk Yates: We really take that seriously. We belong to a local REA group here so we can go to that every month and listen to the speakers and really understand the different ways of buying and selling property. And the financing is huge. We’re very committed to—we try to learn as much as if we were actually real estate investors ourselves.

Danny Johnson: That’s awesome. It’s awesome that you guys kind of narrow down to this niche, however you want to say it. Do you know what I mean? So you can focus and you can go that extra mile and you can understand everything because you’re not trying to learn a hundred different industries. You’re focusing on real estate investors. You’re focusing on us and what we do, and so I think that’s great. And yeah, to your point about the Mike’s, Mike Helper and Mike Simmons. Those guys are awesome. Good friends.

Kirk Yates: Yeah. They’re good guys.

Danny Johnson: Let’s see. What else? So do you provide full servicing of notes for owner financing properties?

Kirk Yates: Well, obviously we keep the books for it. We can keep track of how much interest is due and all of that stuff comes up after the fact usually when a property is sold. One of the things that we always want to look are the loan documents so we can anticipate with our clients that, “Hey, when you sell that property, you’ve got back endpoints or you have a minimum number of months of interest or something that’s due.” So we’re working in keeping records throughout the flip. There’s not a surprise that, “Hey, there’s next to four grand in financing expenses at the end.” And we keep that out on an online shared drive for our clients so they can keep track of it as they go. They’ll always know how much they have into it. We call it our bottom line report.

Danny Johnson: But you don’t get into the part of posting payments in collections or managing Escrow accounts? Or do you?

Kirk Yates: Not at this point. We don’t have any clients who’ve asked us to do that. We do some of that managing within our clients’ bank accounts. We don’t hold it ourselves, but we can certainly help keep track of that and separate that out and make sure that EMDs and Escrow and security deposits and all those things are held into proper type of account and not mixed with other funds.

Danny Johnson: Good. So, let’s get back to some of the mistakes then. Are there any others? Have we covered them through the conversation? Or are there any others that you guys want to share?

Kirk Yates: There’s a few more. I got to say maybe #1 is when you’re using contractors and not getting the proper information upfront to keep track of them for 1099 purposes, so if you pay anybody as a contractor who is not incorporated. So even if they’re in LLC, usually it will fall into this category. If you pay them $600 throughout the year, you have to provide them with a 1099 at the end of the year. And a lot of times in November and December especially if we’re taking in new clients, that’s when we start asking, “Did you get a W-9 from this client?” Excuse me, not client but contractor. “Do we have their social security number? Because we got to send them a report by the end of the January.” So we always tell people, “Until you get that W-9, don’t cut on the first check. You’ll be amazed how quickly you get it.” It’s tough to do it six months after the fact.

Danny Johnson: I’m smiling because I’ve been asked that a lot from Melissa. It’s like, “Did you ever get—?” “Yeah. I don’t know how.” But yeah, we put that into our processes like you said. Before you pay that first check, that needs to be there and signed before you give that first check.

Joni Yates: Just become a habit.

Kirk Yates: Let that become a habit. One of the things people can do—this is not as much of a problem. But receipts and keeping those receipts separate by property is a such a huge problem. I know there’s a lot of receipts in the bottom of the floor of trucks all over the country.

Joni Yates: Boxes.

Kirk Yates: So we encourage you use the technology that’s available. It’s okay if we’ll mention Home Depot for example. They have a Pro Xtra account. That is great. You can put all your credit cards against that account. You’ll have an online access to your receipts. You use the property address as the PO or job number and then we go in there for our clients. We have access to that. We don’t even have to ask them which property it is because it’s already on the receipt and we have a copy of the receipt. That receipt can blow out the window of your truck if you want. It’s there electronically. So we really try to help people with the organization. The organization is tough, I think. Most people run this business probably in their cars or trucks going from place to place meeting clients.

Danny Johnson: And, Joni, if you can move in closer to Kirk a little bit because we’ll watch the video later and it’s like, “Where am I?” So that’s the curious thing. So the receipts. If I’m in San Antonio and you guys are in Michigan and I have these receipts and I’m keeping track and keeping them separated, how are you guys getting—? So are you requesting access to like credit card accounts to see those to be able to enter those? Is that the easiest way to do it?

Joni Yates: Yes, we do get access to credit card feeds. We get what’s called delegate access so we can just see transactions and statements. We don’t need to be able to transfer money or anything like that until if needed. But we can go on there and see what that transaction is. Like Kirk said, QuickBooks has an app where they can take pictures of receipts and it comes right into QuickBooks and then we can do what we need to on our end as far as categorizing it, putting it in properly. There’s another app out there, IFTTT, that you can also just take a picture and email it to us. We have a receipts email for our clients where they can—we get a lot of email receipts. They can just forward right to us. We have a Google drive we share where you can put receipts in that way.

Kirk Yates: We try to make it easy so we get people many different tools. And occasionally, we get shoeboxes. People mail them to us. That’s okay. We’ll go through that as well. So whatever works for each client, as long as we can get the receipt, we can figure it out.

Danny Johnson: Just imagine the [inaudible 00:27:21] when you guys see the UPS truck pull up and it’s got an Amazon smile on it. It’s great that you guys have all those different ways. There are so many ways to transfer information these days, and it’s nice you guys allow people to use what they like to use because nothing stinks more than when you have a way of doing something and you’re told to do it some other way. So that’s awesome.

Kirk Yates: Exactly. Sometimes I like to use Google Drive. Sometimes I like to use Dropbox. What we’ve also done though is—a lot of clients use say for example the same title company. So they’ll just tell the title company, “When you close on a house, email a copy of the settlement statement directly to Kirk and Joni, to the bookkeepers.” So as we’re doing more and more of that, we’re trying to take as much of that off the client’s table as we can when we just simply don’t know we keep a running list of questions out there in the shared drives so clients can go in it at their leisure and answer the questions, tell us what this charge is for.

Danny Johnson: I love that. It’s finding ways to make everybody’s process more efficient like you said from title company sending info directly to you guys and not having to be in a loop. Why do I need to be in a loop when I can just send it straight to you guys and you guys can enter all that stuff in? Nice. So do you guys ever have to contact the title companies to clarify anything?

Kirk Yates: Sure. And I’ll tell you the most common one is we know—for example, there was a $1000 EMD but it’s not reflected on the settlement statement, we want to make sure our clients get the credit for that. We have no problem calling the title company, asking the questions. If they’re supposed to get a $10,000 assignment fee but the deposit only came through for $9600, we’re going to contact the title company, “What was the $400 for?” It’s usually some legitimate fee, but we want to know. So we don’t mind making calls, doing whatever we have to do to help answer those questions. So we’re usually going to be in a better position to have that conversation because we understand what we’re asking than to try and have the client do it on their own.

Danny Johnson: That’s awesome. I love that. So you kind of get an idea for what typically—so the earnest money, how did you know? Did you just know that every time they buy something or sold something like they know the typical earnest money that’s given or received?

Kirk Yates: So when the check comes in, $2500, it’s usually a good indicator that it’s earnest money but we will ask the client what’s this for if it’s not readily available. And we keep it through booking. We keep the separate account for earnest money which so then theoretically if all the properties were bought and sold, that should be at zero because they will go in and out. So we know but we’re keeping track of that by property, “Hey, there’s an earnest money that was receive,” or we know from the contract that an earnest money was given to the title company. And we keep all those documents and we review them again before we finalize the books on that property.

Danny Johnson: Cool. All right. What’s the next mistake? You got more?

Joni Yates: Yeah, there’s a couple more.

Kirk Yates: Why don’t you talk about reconcile?

Joni Yates: Yeah. Reconciling bank statements is a big one. We find that a lot with clients who really haven’t been doing true bookkeeping, and this is important to keep all your bank accounts reconciled in QuickBooks. Your accountant is going to want that for tax purposes, and it also helps you make sure that there aren’t any errors, that something didn’t get put in twice or come through twice. Every now and then, the banks will get duplicate transactions and there should only be one. So reconciling really helps you keep on top of all that.

Kirk Yates: I’m going to age myself here. But when I first got a checking account, we used to have to balance your checking account against what you had in your paper book and what the bank is saying on their statement, and that’s basically what reconciling is. You’ll find things. Sometimes you reconcile and we will find the bank made and error. They charge you this overdraft fee and it looks like you had money in the bank at the time and then something that the client can go to the bank and have that conversation. So just reconciling, making sure everything matches. It’s huge. And when we take on clients who haven’t been doing books for a while, that’s usually the biggest piece. We go back and find just certainly a lot of transactions that aren’t in the books.

Danny Johnson: I remember when Melissa was having a rough day before when she was still doing most of the books. Most of the time it was because of that. It’s off by this much and I don’t know where it’s at, so she’s having to go through everything. It’s like it wouldn’t take so long. But when you have the discrepancy, then you’ve got to figure out where it comes from and maybe something got fat fingered and mistake was made.

Joni Yates: Exactly.

Kirk Yates: And we just cannot stand for stuff to not match.

Danny Johnson: That’s the kind of person you want managing like doing the books.

Kirk Yates: Right. We always say to people our tagline for our business is: We love bookkeeping, you don’t. No one gets into real estate investing to do their books. But if there’s a $1.50 charge and we’re pretty sure it’s parking, we’re going to be a little bit of a bulldog to make sure that is what it is and we’re not just going to let it go. But it’s important that at the end of the year that you have everything great for your tax but also, as we talked about before, being able to manage your business and know where your money is coming and going helps you, not only at that time but helps you to benchmark years down the road, help you to budget your next flip, helps you to budget your marketing for next year. So the better we keep track of that, the better reporting, then the better too our clients are going to have.

Danny Johnson: So when somebody says, “Okay. I’ve had enough. I don’t want to do this anymore. I’d rather be out there doing these deals and checking on the jobs and all that kind of stuff,” and we explained the process a little bit, but how long does it take to get up? If I said, “Hey, why don’t you guys start doing ours? We’re flipping x amount of properties per year, and we’ve got all this stuff.” How long does it typically take for you guys to get on boarded and have everything ready to go towards then a maintenance kind of thing?

Joni Yates: Realistically, of course it depends on what type of investing you’re doing but typically about 30 to 45 days to really get it to where we can run you reports that are accurate and make sure everything is in there and everything is cracked. Like I said, sometimes it’s quicker and sometimes we have to drag it out a little bit more just to make sure it’s cracked.

Kirk Yates: Also, it really depends on the scope of the business if people are doing a large volume. And if their books haven’t been updated for several months, it might take a little bit longer but we don’t mind bringing the midnight oil and working until 3 o’clock in the morning to get clients up to speed and we want to get to that point like you said where it’s just monthly maintenance as fast as we can but also by being accurate.

Danny Johnson: Cool. So the communication. Like you said in onboarding, the thing is you guys are trying to understand what everybody is doing. There’s a lot of missing information, and you’re trying to do all that. So how do you manage that? I’m sure it’s going to be hard. That’s got to be probably a pretty tough thing, just trying to get people to send the stuff that you’re asking for. So how do you handle that? Do you guys batch a bunch of the stuff that you need into one thing? Or is it a message every time you need something? How does—?

Joni Yates: We keep a worksheet out on Google Drive. Every client, we do a shared drive with them. And we have a list of questions by bank or credit card account and just put them out there. So they’re out there all the time and you can go in. If you’re up at 1 o’clock in the morning and you want to go in there and answer questions and we’ll check that and put it in to your books. So that way we’re not constantly pestering. Occasionally, of course we communicate with them via email and phone and such but that’s typically the best way that we can communicate with them.

Kirk Yates: And if we really get to a point, maybe there’s a complicated situation and this client is doing some stuff that’s maybe a little new to us, we’ll get in a car on a plane and we’ll just going to see them. We’re virtual, but it doesn’t mean we don’t leave the office.

Danny Johnson: Great. I’m sure you’ve got a lot of people telling you how much you’ve changed their lives once they’ve agreed to finally let go and let the professionals take care of it. Melissa, as soon as she let go when—it was just like I should’ve done that so many years ago.

Kirk Yates: People have said and I know the Mike’s have said many times that it’s not just the freedom of not doing it and having the time back to run your business. But I think also if you have a professional doing your books, then you know they’re being done and you know they’re being done correctly. Maybe your blood pressure goes down at one point or maybe one less sleepless night. I know our industry has a lot of other stresses. But if we can take one little piece off of it, then that is going to help our clients’ business and they’re going to produce more than they’ll ever pay us.

Danny Johnson: For sure. Let me see. How many clients are you guys looking to take on? Do you have a limit on how many you’re willing to take on at this point?

Kirk Yates: We’d limit how many we’d take on at one time because the setup takes a while and can be intensive. So for us, that number is usually somewhere around 10 at a time but we have staff and we have the capability to really take several clients on an ongoing basis. If anybody’s interested, we’ll—if we couldn’t take them on and do a good job, we would tell them and try to put that off maybe a couple of weeks. But for the most part, we’ve got it down now that we can take on whatever we need to.

Danny Johnson: Great. You’ve been doing it long enough to experience the kind of busy times to get through those then, huh?

Joni Yates: Right.

Kirk Yates: Yeah. And again, by having so many clients in the same industry, a lot of us still sort of plug and play at this point. We know who all the vendors are. We understand how to read settlement statement. We understand how to read the financial documents. So a lot of clients that we asked questions a year ago we don’t have to ask anymore, and we’re going through more and more every day. So usually, the questions are very specific like, “Why did you use your personal credit card instead of the business credit card?” Things like that, but we sort through that.

Danny Johnson: Great. All right. Do you have any more mistakes to share or any tips or anything that you want to share with the audience?

Kirk Yates: Yeah. Actually, what I just mentioned brings one up is that in our business especially when you’re just starting out, there is a lot of combing between personal and business funds. The ideal situation is don’t do it, but we just know it happens. If you’re doing your own books or you have a different bookkeeper than us, just make sure that they have some way of keeping that separate. And either the business is going to reimburse you as the owner and it’ll be whole; or if not, then you’re going to consider a contribution of equity into the business. But what I see too many times is people, they just don’t track the personal. They know they put it on their personal but they don’t want to mess with it and it’s been months and months and months and they say, “Forget it.” We could forget $3000 or $4000 for the write off if you’re not doing that, maybe even more. So try to not use your personal money. But if you do, keep track of it.

Danny Johnson: Great tip. That’s a big one. All right. So how can people get a hold of you guys? What’s the best way for anybody listening that’s interested in talking with you more about if they want to come over to you guys or if they have questions about how they’re handling themselves? How can people reach out to you?

Kirk Yates: Probably the easiest way from here is to go to our website, Hit the contact button and let us know when’s a good time to reach you and we will follow up for sure. Send us an email which you can also do that directly from the website.

Danny Johnson: Awesome. And you guys also mentioned that you’d be willing to give people discount if they listened and found out about it from this podcast. And what do people need to do and what is the discount that you’re giving?

Kirk Yates: So whether you sign up online directly on our website for our services or if you talk to us, just tell us to use the coupon code “Danny,” and you will receive 50% off your first month of bookkeeping.

Danny Johnson: Awesome. It’s a good discount.

Kirk Yates: Yeah. Well, we want the business.

Danny Johnson: All right. So the coupon code is “Danny.” And I think we discussed a little bit—you’re saying we want to give a discount. “What should we have as a coupon code?” And it’s usually either “Flipping Junkie” or “Danny” whenever we have a situation where somebody’s willing to offer a special to the listeners out there. And always hesitate to do “Flipping Junkie” because of the different spellings and all that kind of stuff. Danny is just real simple, D-A-N-N-Y. But like I said, if you talk to him, just mention it. That way you get that discount as well. I really appreciate you guys taking the time to get on the show and find out a little bit more about you all. So thank you so much.

Joni Yates: Thank you for having us.

Kirk Yates: Thank you so much for having us.

Danny Johnson: All right. You have a great day.

Joni Yates: Thanks. You, too.

Kirk Yates: You, too.

Danny Johnson: I almost forgot. Kirk and Joni also provided this awesome guide showing you how to use a custom report step by step, how to set this up in QuickBooks online. Basically what they found is that QuickBooks online has some of the templates of reports that they need for clients. They found that there were some that they wanted to put together to kind of help show their clients where they were on different rehabs, different properties, and in their business. Kind of like that high-level view that we always talk about as being a part of a flip pilot, having that higher level view of your business to see what’s happening. And so they found that they needed to create this hacked report using the budget tool within QuickBooks online, and they put together a step-by-step guide for you to be able to do the same thing to take advantage of seeing the numbers in a different way. It’s a very awesome guide, and it’s free to download. You can go to You can download that free guide [music] that they put together for you. So enjoy that and everybody have a great week. See you next time.


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