QuickBooks Online 2019 Tutorial: Recording a Rental Property Purchase

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For recording purchase of rental property (real estate) using the ALTA Settlement Statement (AKA: HUD 1 Statement) with all the proper Debits and Credits in QuickBooks Online
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[@33crushman]

Great video, very helpful to see you walk through how to enter it in the system!

[@leonardoneumayer2066]

Thank you so much for your amazing content! I am new to real estate accounting and this has definitely cleared so many confusions for me. But I do have one question. So I intend to purchase a property with private money loan to use it as an airbnb. In regards to the balance sheet should I incorporate all assets and liabilities of the airbnb business with that of the rental property purchase to present to my investor? Or what method would you recommend?

[@FrankandJanaeFear]

Hector, great video and very informative. Question, at the beginning of the video you entered the Deposit as a transaction and then entered it again in the Journal entry. Did that result in the deposit doubling? Also, you mentioned there may be different ways to enter Loan Points. Do you have any more information. Thanks!

[@ThePurehoney]

Thank you so much! This was exactly what I needed to help me today :)

[@HectorGarciaCPA]

Awsome

[@candicewhitley3750]

Thank You Hector !! What would you do with the very bottom line if that amount didn't come one of their bank accounts in quickbooks? Would it then go under "owners investment"?

[@normajurado4695]

Thank you so much for the detailed video. It was so helpful.

[@HectorGarciaCPA]

Thanks, happy to help

[@garrettduyck9312]

Wow this is very good. You answered my question about sellers credits, thank you! Do you have a video for how to deal with depreciation?

[@HectorGarciaCPA]

Garrett Duyck no videos on depreciation... yet.

[@landmaster23]

Hector do you have a spreadsheet for clients flipping single family home? David from Chicago..cold and rain today

[@user-wr9vl2me3q]

Awesome breakdown, thank you!

[@HectorGarciaCPA]

Glad to help!

[@sunmichoi7335]

Thank you

[@HectorGarciaCPA]

sunmi wilson you welcome.

[@maxzhao3514]

This is very helpful, thank you! Only one question that I have is, is it wrong to expense the origination cost instead of adding to home value? Are you depreciating this cost fo 27.5 years? I thought IRS allow you to expense the origination cost for tax purposes.

[@DT817tx]

You would add it to the basis. If they refi and its on the closing costs on the refi then u can amortize the closing costs over over the life of the loan. 27.5 life for the building

[@keshadiaz886]

Do you have the best way to handle the prepaid expenses and when to move them from the BS and PL. Also any special way to handle the rental expenses

[@HectorGarciaCPA]

Journal Entry

[@VideosArtist1990]

Thank you Hector, for the amazing video, I have a question regarding Huds, Here I have a property purchase Hud, I have not received the cash from the borrower line in Bank so I am a little bit confused about how to enter that amount in Quickbooks journal. Please help me with this. Thank you

[@HectorGarciaCPA]

You might need some One on one support

[@atlasurology]

Great video- wow. Clarifies a lot. Question: when determining the land value, if the county appraiser values the land significantly less than the alternative calculated 20% number, would it be best to use the lesser of the two to so that the depreciation is more? TY!

[@HectorGarciaCPA]

Depreciation happens based on purchase value - Land cost. 20% is generic estimated number that accountants use, but you can use any formula you deem fit. At the end of the day the property appraiser is also an estimate

[@Mamaof5Blessed]

Thank you so much Hector! This helped me set up my first client as a flipper. My only question is, why did you not put names on the name column?

[@HectorGarciaCPA]

In this case i skipped, but i think it wouldn’t hurt to do it

[@DJSWIFTNY]

Great video! Could you confirm that adding title costs and recording fees should go into the property account? It seems like this would inaccurately inflate the value of the property. Any feedback on this is much appreciated. Thanks!

[@HectorGarciaCPA]

All aquisition costs go into the property value

[@kendrkaye]

Thank you so much for sharing your expertise! I am a ProAdvisor and I always learn something new from your videos. I have a question about recording a closing statement - how should a credit to the buyer be categorized in a journal entry? I have searched high and low all over the internet and cannot find an answer. Any guidance would be so appreciated.

[@HectorGarciaCPA]

Reduction in sales price

[@kendrkaye]

@@HectorGarciaCPA thank you so much for taking the time to reply

[@emmylousanpedro8529]

Hi Hector thank you so much for this very detailed video, I only have one question. What if there is a lenders holdback or funds retained by lender, how can this be entered? Thank you.

[@HectorGarciaCPA]

In the balance sheet as an asset

[@emmylousanpedro8529]

@@HectorGarciaCPA thank you

[@rashid9554]

City taxes amounting to $328.23 have been prepaid for the period from June 17th to September 30th. This amount should be recorded as a current asset and not recognized as an expense.

[@HectorGarciaCPA]

@@rashid9554 depends if you are doing the booking the day of the closing of the next year… the next year, you just book as expense

[@rashid9554]

@@HectorGarciaCPA okay thanks.

[@rashid9554]

Origination fee $6665.47 is not correct

[@HectorGarciaCPA]

Thanks