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The Expensive Cost of Being Disorganized in Real Estate · The Investor Shed Podcast

• Nick & Jeremy: ⁓ my gosh, we're so glad you're here. Welcome to the Investor Shed. Welcome. Welcome to the Investor Shed, everybody. I'm Nick Beverage, your host with Jeremy Kitchen. You're back again. I'm back again. Thank you for being back again. God, it was a nightmare when Brett was here. Brett, by the way, you were not the nightmare. Nick just said he shit the bed, not you. I just know Brett might be listening, so I like to say stuff like that. OK, yeah, yeah. If anybody's listening at the beginning, it's Brett. Shout out to Brett Shoemaker. Number six or seven, Lone. At least number three at least. Yeah, depending on who's in the room with them. Of course. Great guy. Yep. All right. Thanks again, Brett, for being here. Come back some other day. ⁓ Hey, you want to talk about real estate today? Yeah, we've been talking so much about AI and open claw and all that stuff. And we might get into that a little bit. I you love it. But let's talk about a new topic in real estate, which we never really get into much. ⁓ But I think people can learn from it. And it is the disadvantages. of not being better organized. ⁓ And what we're going to kind of go through today is a personal experience by me. ⁓ And ⁓ some of it might be opinionated. ⁓ All of it was my fault. ⁓ ownership. That's great. ⁓ They're going to be a little bit different than what you might think or what you might hear on real estate investing courses or whatever. Sure. but I'd like to get into some topics like ⁓ organization, not necessarily like LLCs, but just having your finances organized, ⁓ taking certain steps when you sell properties to not cost you extra money. How to maybe better do your bookkeeping so you're not overpaying. ⁓ Things like that. Does this sound exciting or what? I think it sounds exciting. I love being robed back into a good topic of like, you know, I'm not as organized as I should be I mean there are many different ways that I could be more organized than I am right now I always love hearing this stuff and I think it's it's important to know the trials and tribulations But before we get into that quick shout out to our sponsor, of course ⁓ of course, Penny B's handcrafted. So bring out the soap bit ladies and gentlemen bare essentials ⁓ These are honey based palm oil free their essential oil blends and they use natural colors natural ingredients everywhere They smell great. They look great. They feel great Penny bees comm is going to be your website to order the soap now if you enter the code shed Shed in the promo code you get 10 % off lifetime purchases of your soap these things make great gifts your spouse will love you your kids will love you more this is not clinically proven by ⁓ They are very good soaps, so check them out please. And believe it or not, we're not getting paid from Penny Bees. We got three bars of soap from them and that's how much love they get from us now. No, I just think it's great. It's a great product. I do rub their soap on my naked body when I'm in the shower and I enjoy it and I'm going to keep talking about it. ⁓ So until these bars of soap run out. Yeah, every time we use a new one, we're just like next week it's going to be one. We're getting close to being done with the first bar. I'm done with one and a half. We back and forth. We Shared custody. huh. Nope. See, at PennyBees.com, promo codes shed for 10 % off your order. Let's get into the episode. Yes. And we're going to skip the smelling salts today. We'll do it next time. We? Okay. All right. Hey, so when you're flipping houses or just, you know, buying and selling rentals, it's easy to overlook the small things. So here are some mistakes that I've made that I'd like to share. I love it. ⁓ And you've made a lot of mistakes. Here's an ongoing mistake that I keep making and I don't know how to stop myself from making this mistake other than just the continued pain that builds up of overpaying for insurance. Okay. ⁓ Now, it's not like I'm not getting quotes. ⁓ I am. I'm usually running it by a couple different people. Well, usually one person and he'll get multiple quotes with different Insurances and i've tried other people. I I like josh tv Okay with ⁓ guardian insurance, ⁓ if you're in north, Idaho, he's a great guy for flips. ⁓ However The mistake I typically make even though I have a checklist when I am done with the project When I finish the house and when the house sells when I fix and flip a house I almost always forget even though I have a checklist of things to do and it's on the checklist to email my insurance guy and say, hey, we sold this house. Can you cancel the insurance and refund anything that may not be anything that's not used? so essentially a lot of the times when you're buying fix and flip insurance, it's good for like a year or whatever. And typically it's wrapped in the closing cost and you might be paying, you know, a thousand bucks, 2000 bucks. ⁓ For a 12 month insurance plan on whatever the dependent on the property type and all that stuff sure ⁓ The mistake I make is you know, it'll be about a six month project and I'll forget to cancel it And they can backdate a little bit but only so much sure The problem comes is when I get that renewal notice a year later and I'm like shit All right, they can't backdate that much So I always ask they can backdate like maybe three months or so. Yeah. But three months from a year is like it's just not typically I'm not getting anything back. Right. ⁓ So I just burn through, you know, easily. I think my average ⁓ is about three hundred dollars every time I screw up. OK. much money I lose. Three hundred bucks is it adds up. So that compounds specifically. Yeah. You're doing four to five flips a year. That's like fifteen hundred bucks just right there. Yeah. But I think on this most recent one that I realized I screwed up on I could have saved like $900 if I if I would have cancelled it in time so or at least within a couple months Okay, I want to talk about this and I know you said like it's your fault and it's on your checklist But I want to get to the bottom of like why why do you not call? I just don't think about it. You know, it's on checklist. I don't I don't print my checklist That's that's so there's your there's your Big things. Yeah, one of the big things on the checklist is to you know, and this checklist I forgot what it consists of because I haven't looked at it in a year and a half. Maybe that's my problem. Sure. I'm pretty well organized these days. Sure. So I get ⁓ this little piece. Gosh, it sucks. I keep forgetting. So, you know, like the old saying is like insanity is doing the same thing over and over and expecting different results. Right. I don't know. I don't know what you expect to change when you know it's coming and you do five to six of these a year. I'm not trying to pick on you. I just think like, dude, like this is an easy, easy fix. It's such an easy fit. Print out your goddamn checklist and like literally check it off. That's all you need. reason I'm talking about it out loud is because I'm not the only one. Right. But this this gives you accountability at the same time. Yeah. It's like do the thing, man. yeah. Well, it's happened so much this last year again. And I felt like 2024 was a pretty good year where I was pretty good about. Yeah. calling and because I only flipped a couple houses. You know, and emailing and just saying, hey, good news. We sold this property. Can you cancel the insurance and just, you know, refund anything extra? Yeah. That's already prepaid. So, yeah, that's that's one of the big things. And all I got to do like I'm closing on a flip next week. insurance on these two lots are very cheap. ⁓ But I keep having it. It's like in my mind every day. ⁓ As soon as that closes, I need to email my insurance. Are these the pineapples ones? Cool. You're closing. Congratulations. Yes. Thank you. Yeah. So, yeah, finally sold those. Nice. Yeah. So anyway, that's that's one of the big ones. It sounds sounds simple. Sounds like it. Why wouldn't you? But like when you get ⁓ a flush of cash in your bank account, ⁓ you typically are doing a bunch of stuff. You're paying off debts, you know, paying off credit cards. onto the next project, you're picking up your, you know, getting your lockbox. ⁓ and the next thing that I forget sometimes calling the utility company and telling them to go ahead and cancel my account as of this closing date. Sure. Okay. ⁓ that one has also been unforgiving sometimes. And I just recently, the reason I wanted to talk about this is because I just paid a $230 bill. ⁓ For my The buyers that bought a house in bonnards ferry a year ago. Okay. Wow. ⁓ I so my mistake I didn't realize a vista was serving the gas obviously it's a Very common a vista usually does all the gas in north idaho. Sure ⁓ I didn't even think about it. I forgot that I even opened an account for it But what I I remember, you know with bonnards ferry bonnards ferry actually provides the city provides the power. Okay ⁓ so I thought When I called and canceled all the utilities that I was all good, totally forgot about a Vista that there's a gas ⁓ bill that piles up. And I forgot to on that whenever I opened that account, ⁓ I forgot to just put it on my register of things to keep track of. Yeah, because I wasn't even getting notified ⁓ via mail or anything that this account account existed. Gotcha. I didn't find out till. I got a letter in the mail saying, this is going to go to collection soon if you don't pay this. And this was six months later. Okay. Yeah. But it was only $230. I ⁓ was like, ⁓ jeez. I call them like, when did the new owner take over? They're like, just last month. So I've been paying this for the new owner for five months. They're like, yeah, we don't know when you closed. I'm like, yeah, we closed in this May. May date or whatever. They're didn't tell they're like, yeah, can call the buyer and see if they'll backdate it, but we can't backdate it for you. Right. ⁓ You know, and I was just like, damn it. So I get ahold of the agent and I'm like, hey, can you have your buyers backdate, just do the right thing and backdate this for when they took ownership of the house? Yeah. Because I have a bill here that just went underneath me. just didn't notice it until now. I thought I canceled the utilities, but apparently I didn't. And she said, sure, I'll take care of it. And then it didn't happen. ⁓ I had to follow up again a month later. I totally forgot about it. I checked in with Vista. No, they didn't take over. And I checked in with her again. like, hey, do you mind? I'm like, this is about to go to collections. Do you mind getting some feedback real quick if they're going to do this or not? And then she sent back a message like, they were extremely offended. And they don't feel like they use that much in gas. And ⁓ and they just think you're an evil person Like what? didn't they i'm paraphrasing. Yeah 230 bucks for five months Just the fact that I asked them to do the right thing is probably my language i'm like can you ask them to do the right thing and go backdate it probably when they When they actually took ownership. Yeah, ⁓ but apparently I offended them and then ⁓ But she didn't necessarily say that they weren't going to do it. Mm-hmm. They just said that they were very offended and they'll So is that a guess? They'll get back to me the next day they were fuming. OK. I need to calm down. OK, here's the thing. I forgot about it again. I was just going to be like, well, we'll see. See if they actually do it. Like I'm at the point where I'll just pay the bill. Yeah, it's 230 bucks. It's not worth ruining my credit over. Right. ⁓ It's not yet in collections. I put it to the side. I let all those bills pile up that most of them are auto pay and everything. I went on vacation last month. Totally forgot about it. And then I finally, yesterday, I was going through my stack of, you know, 60 different bills and stuff, just making sure everything's good and updating numbers and all that stuff. Yeah. Most of these bills again are on auto pay. Right. You just get the paper. I just I just go through and just make sure everything's accurate. And yeah, go through and update numbers. Cool. And then, yeah. And then this thing is on the very bottom. And I'm like, ⁓ shoot. I'm like, let me call a VISTA, see if this ever got taken care of. Yeah. And they told me, yeah, we sent that to Collections on Monday. ⁓ good. This was two days late. This was a Wednesday when I called on it. Yeah. I'm like, ⁓ shit. I'm like, you got to be kidding me. Jeremy, I have not had a late payment on my credit report since 2010. 16 years. my new credit deal, have perfect credit. Like, it doesn't show on my credit that I've ever been late on anything. But this went to collections and I was just like, holy shit. Like I'm a guy that pays my bills. Like I have the 800 credit score and that's one thing I'm like proud of. Like, look, even with the financial mess I went through, at least all my bills always got paid. And I was just so nervous. So I called, she gave me the number of the collection company. They couldn't do anything at that point. I called the collection company and they had... no information on it yet. Yeah. So they have to wait till it gets through and process. So I'm going to have to follow up on it again next week. But it's just like, this is all simply this all spawned from me just not canceling the insurance or the utility. Yeah. All the utilities. Yeah. This thing that I click not not just this all stem from just I already have a checklist and this is on the checklist that you don't look at. I just didn't. I did for a couple for like a couple properties. I know I know it got so bad. had to make a checklist. That's good. I think that's how you optimize like, okay, what's not working? Now I forget to print the checklist when I sell a house. So this all stemmed from me just not following my systems and processes that I put in place. Yeah. This all could have been avoided. Now there's a good chance ⁓ according to Vista and this collection agency there, it's probably not going to hit your credit right away as long as you just take care of it. Yeah. But you're you're in jeopardy here. So You're in jeopardy buddy. Your 800 credit score is gonna get completely ruined by it will It won't get completely ruined. Yeah, I can't take that you might go down like 780 Well, here's the deal when I when I first started selling real estate if you had any late payments at all on anything Yeah, you wouldn't qualify for a mortgage for a year. Yeah I'm trying to refinance an RV park right now. I can't screw up my credit at this time. That's just like I Just can't do it Does the business have credit does Nick LLC's Nick Estates LLC have credit? No, it's an RV park LLC But it relies on it relies still on me and my credit and also the RV has to hold up and have its own bank Not just bank account but like completely its own good books two years of good tax returns and incomes and all that stuff for sure But they still look at the brought when they make a commercial like that loan like that They still even though it's it's mostly weighted on that business They got to look at you as a person, you operating it and look at your whole financial situation to see if they're going to do the loan. Yeah. So that's something people don't tell you if they just preach, Hey, it's just a business. Go get the business loan. Build up your business credit. You still got to be responsible on your end too. You got a personal guarantee. Once you get into the real world of like banking and financing and stuff, just because you have a business, they still look at the broader picture and they're going to make choices based off common sense versus ⁓ well, this is just a box. Right. You know. Yeah. But I mean, like, guess I common sense. Yes, you should take care of it 100 percent. But like in the grand scheme of things, like if they're looking at your credit score and they're like, he makes a million dollars a year and he had two hundred dollars go to collections. He's probably OK. Well, it justifies them ⁓ bumping the interest rate up. Sure. ⁓ Which that two hundred dollars could easily turn into three grand a year that you'll pay more in interest every year just because you screwed up on a $200 bill or something like that. there are serious financial consequences for being irresponsible. Sure. That have long term bad side effects. Is there any way to put it in your system or like, I know you wanted to print it out checklist for when you close on a property, but like, is there any way to have it on a computer, like a Google Sheets where it auto pings you like, hey, this is closing. It's time to go through your checklist. ⁓ I think I can I can easily set up like an open cloud or something like that to do that Yeah, and just like a monitor my emails and anytime you see that there's a closing Email me the checklist and then just keep emailing it Tell me every day until I say that it's been done or something like that. Yeah, you can set things up like yeah Yeah, and I guess what I'm asking is like obviously like I get distracted too And get overwhelmed by things. So sometimes things gets pushed to the side. But on something like this, where it's an easy thing, like you've got the systems in place, you just need to execute on the systems you've done. They working on it, Jeremy. I know you're working on it, but yeah, it all is why I'm this discussion is just like, I'm just pulling my pants down and showing you how small it is. Yeah. I'll show mine if you and and and how to not be so small. Yeah. He's got to warm it up with. With better organization better organization ladies love it. Would you get better organized? That's true? Yeah No, that's a good idea. And like I said like if this is something as simple obviously every checklist is going to be different So like having a base checklist of like canceling insurance cancel this but like on these special ones We're like, hey, don't forget to cancel the Avista that you set up which is separate from the city utilities Yeah, yeah, like having like an extra notes. Yep extra place to put all your extra things in yeah and the problem there was like the setup too because I actually I thought I did it at that time. thought I took care of the utilities, but I missed one. Right. Yeah. So that was bad setup on my part. Cool. And then maybe it just comes down to like follow through with other things too. Like obviously, once you close, if there's anything you miss, double check and call these utility companies yourself. Hey, just close on this property. Just making sure we're good. I got no extra weird things in this one. Great. Cool. Now this one, this is a hot take. This is my opinion. This is my experience. A lot of people are not going to agree with this. ⁓ Here's one of the biggest mistakes I ever made. I hired a bookkeeper. Okay. In, you know, in an age where I'm the, I'm an entrepreneur, I move money around. I need the, my biggest asset is knowing what kind of, where my money is and what I'm doing with it. ⁓ And I thought I can outsource that to somebody who just handle all the money issues that didn't have that didn't know what to anticipate with my brain and what happens and I didn't realize just how easy some of these tools are, you know, they're confusing at first. QuickBooks, QuickBooks online can be very confusing and intimidating for anyone who hasn't used it. You got to just take a few hours to figure it out because once you do. In my opinion, probably a lot of people won't agree with this, but in my opinion, a bookkeeper gets in the way of you because they what the bookkeeper wants is for you to give them all the stuff and then they take all that stuff and they put it in QuickBooks. Sure. It takes longer in my experience for you to get all the stuff to the human instead of you to just give it to QuickBooks. Sure. because it is so easy these days to get what you need into QuickBooks. You just sync your accounts. ⁓ It gives you an email that you can just with your phone, if you have receipts and stuff, can just, you know, I just take picture of like seven receipts and this is all for this project. After I go into my iPhone and I look at my photos and I select all seven and I hit the email button and I email it to my very top pick is my QuickBooks. Email and those emails or that email gets sent to my quickbooks account And all those receipts are just they're magically waiting and they know the amounts For me to categorize transactions later. Sure, and then it will also put that receipt in there too. um just for uh, and then Once a week I try to do this once a week instead of once a month Yeah, whatever. It sucks when you get behind on it. Like I got behind on mine i'm almost caught up but like What do you get behind hurts? I just I click in the bank transactions tab in QuickBooks and I go through each credit card and each bank account and I just grab each one and now with AI it's constantly it's remembering what you did the month before the month before that so it's getting easier it's kind of like predicting what you're gonna pick and it auto fills a lot of this you just have to hit confirm but the amount of money I wasted by this not being done correctly ⁓ or being confused or having you know run through me and then two other humans until it gets categorized yeah ⁓ Was a complete disaster and a complete mess Because I in my business the way I run it ⁓ You just need to be in control of the money and know and categorize the money properly because if it's not there are serious consequences for you not having your books straight Yeah And sometimes the biggest culprit is you just relying on somebody else to read your brain sure and and sometimes they don't do a good job of ⁓ Reading your your mind And following up on it if they really can't read their mind, they might just do whatever is more convenient at that time or categorize it incorrectly because you didn't write down something or didn't relay the message. Yeah. Or just put it in a completely separate folder to check on later. And then you find about it. You find out about it months later. Sure. And you're like, ⁓ wow, there's all these there's, you know, almost 200 grand of expenses here that were never categorized. I've already paid out all these partners on all these projects. Yeah. No wonder I'm broke. Yeah. I paid them more than I should have. Because all these category all these expenses never got categorized. I thought these books were done She said they were done ⁓ But there's all these expenses that were never categorized which those books were not actually done. So sure I you end up paying for it, right? ⁓ So my experience is Get a little savvy with QuickBooks. It doesn't take much savviness ⁓ Categories your own transaction if you especially if you have partners Look it over a couple of times make sure that every know every dollar that was spent through credit cards is updated and categorized correctly. ⁓ It would have saved me an insane amount of money. It's almost disturbing talking about it. yeah, any questions? Yeah, a lot of questions. Yeah, where to start? and I know Nick, this is your own personal experience of course. So like you saying like you don't need a ⁓ bookkeeper is I think very much opinion and that's okay. Here's my here's my hot take and my theory on that. ⁓ You don't need it because usually your bookkeeper is using QuickBooks or something. QuickBooks is a bookkeeper. QuickBooks is the bookkeeper. So by adding a human in the mix you're you're more likely to confuse things and make ⁓ you know Inaccuracies sure then if you were just to get the the information you just relate directly to QuickBooks because that is the bookkeeper sure Again, like I'm playing devil's advocate. Yeah, I don't care if you do or don't use a bookie ever But I think everyone's businesses is not shaped like yours You know what? I mean like like some people like they don't have time like I don't have like I want to hire a bookkeeper because QuickBooks is overwhelming for me You know, mean and then when I'm overwhelmed nothing gets done anyway So like if I could have somebody to talk to just big hey this goes here. This goes here. This goes here I don't know how to do that. But can you make that happen? Yep. That sounds great to me Yeah, but again like this is like everyone's got their own completely separate businesses how they run things I know when you had a bookkeeper You had multiple flips going on at once. That was very common. That was when we called you over leverage Nick beverage And again, I'm not saying anything bad about the bookkeeper or you but I think it was a perfect pairing and a perfect storm where it didn't make sense Yeah, and again, I'm not I'm blaming myself here. Not the bookkeeper. Yeah I'm just saying for me and my setup and investing in real estate the way I do. Mm-hmm. It was a horrible mistake, right? It was a horrible mistake to Just rely on somebody to fix all your financial problems. Yeah ⁓ that that didn't know didn't have the complete story and and didn't sometimes bother to get the complete story when they said it was done right and i think your complete story's good sorry and here's here's where it really hurt too ⁓ you know we had multiple llcs and they were going to handle you know communicating with my cpa for taxes and they they didn't get any Any of the information and time, you know, before March 15th to hey, can you hear these new LLCs? Can you get these business extension? ⁓ Files done. Yeah. That you that you'll need since the taxes aren't going to be done in time. Right. But with LLCs, you need those business. You need to file for extensions a month before ⁓ your personal stuff. Yep. You know, March 15th versus April 15th. April 15th is when taxes are due. March 15th is when the business corporations have corporations have to either file or or ask for, ask for more time. Yeah. Also always ask for more time by the way, like that is a very good strategy. Yep. So there were about 10 or 12 in 2021, ⁓ of my businesses that never asked for an extension share, ⁓ which resulted in over 25 grand in fees from the IRS. and ⁓ And the bookkeeper didn't care. My CPA didn't care. It was just on me. And I've been fighting those for, I got a few of them released. I've been fighting them for five years. And then it happened to get in 2022. Just wasn't filed in time on a few different LLCs. Fighting those, got some released. the IRS is nice to me on some of them, strict on others. I don't know why. It just, I guess it depends on who's processing it on that day. I just keep sending the same message. Here's proof that it went out. I've got proof ⁓ from these CPAs that give me postage proof that, they did send out. ⁓ We're trying to get the fees released, okay? Some of them have. And I think sometimes we were just asking for, or actually, I don't think we were completely being fraudulent. On some of them, I think we were just like, hey, here's email back and forth of me. sending this to my CPA. It never got relayed. Could you just forgive us here? Yeah. And I think that actually worked a couple of times, but not on all of them. And don't expect it to work on all of them. It's been a complete lie. It sucks when you get, you know, every month bills from the IRS that say, hey, you still owe this or, hey, we're looking into that. Yeah. It's always a little bit of anxiety opening this because it's... It's only like one in eight is when it's like, good news, we're going to forgive you on this one. Those are the thinner ones. of the time, most of the time, it's, hey, we need 60 days to review this again. And then sometimes it's just, hey, we're putting a lien on this. We're going to put a lien on this one. This went to collections and you're just like, gosh, come on. Yeah. ⁓ So it's a true nightmare. Obviously it's on me. I know when business filing extensions are due. I've known that for a long time. I need to be better at not just relying on other people to make sure that they filed that for me. And I need to make sure that it's actually done. ⁓ So that's what I'm going to recommend you guys do as well if you're running multiple LLCs. You can't just rely on other people to make sure it's done if you don't ask in time. ⁓ So yeah, that's a big one. This year, first year ever since I've been in real estate, where my taxes are done. Holy moly. Before. Mine aren't even done yet. They were done done a week ago. Yeah. So that, that was early. I think it's cause I've been a lot more organized lately and he was able to just like get it done quicker. Yeah. ⁓ I also was taxed. My tax bill is like half what it normally is. ⁓ not my tax bill, my, my tax preparation bill for my CPA. ⁓ cool. Cause I think you, you cut down on all the amount of. LLCs and stuff you there's less LLCs. Yeah, those are 500 bucks a pop every time they have to file a thing So more income and I'm getting 6800 bucks back Wow, which is cool a return a return crazy, you know, I didn't pay taxes. So Thank you. Tom Robinson. Yeah, he's been on the Robinson financial with Rob pretty great guy Tom and Tyler over there they work magic again like like Good job for you know, taking extreme ownership on that because obviously like I said Said every every situation is different if you need a bookkeeper or not I I do know like when I was involved in those businesses. It was chaos Yeah, it was like like I was just doing too much We were working on violet at that time and that was one of the things but I I do I do very vividly remember your Contractors like buying multiple things for multiple properties on the same credit card Yeah, I'm the same credit card right and they're instructed to use But do different transactions. I don't think they did That is very possible. Yeah, because you're just relying on other people to do. remember that happening a couple of times. I'm like, that feels like it'd be hard to track. And like, that was literally my thought. Like, how the fuck are you going to track that? How do you know which trusses go to what and which nails go to what? Yeah. Anyway, like those are all small things. But like, that's probably how stuff gets thrown into this. We don't know what this is category. So my any contractor or project manager that's ever worked with me in the past, they know that I've been very adamant about like, hey, Each project has it their own partners. Yeah. Um, do you know who your contractors are? Well, I The ones I didn't trust I never gave a credit card. Sure. I'm like no no offense to Sean We love your brother, but he's not good with books. I never gave Sean credit card. Okay I don't know who gets it. What was account sure, but they are the Those every time you do a purchase you just give them a p.o number for that proper address. Got it But then what's stopping you from like buying multiple things on one p.o? What's stopping me? Yeah, like if he was buying multiple, if he was buying things for this house and this house and then just putting them on one, one P.O. doesn't do that. Yeah. OK. Have you seen him do that? I have not seen him do that, but I just I remember very vividly like, ⁓ y'all put these on like one credit card and it was one transaction and it was like they were buying different things for different properties. OK. Was it was it labeled? What was for what? No. Who did that? I don't remember. This was. I have no idea. Okay, but just it felt like it was a very easy thing for somebody who was maybe in the construction game to be like ⁓ I don't know what this goes to we've been instructed to buy all these things Let's just put them on one receipt so we don't have to sit in line for a long time. Okay Yeah, cuz at that time I only had ⁓ Two people that had credit cards. Okay, we had your ⁓ and then there was a Lowe's account sure and I could be wrong I just I thought I remember thinking like this looks like it get complicated very quickly ⁓ I don't know the back end of that. whatever absolutely. Yeah, and that was the whole point of you know, we have those meetings constantly and they were always supposed to return give me the receipts so that these could be categorized correctly, right? ⁓ But then why weren't they categorized correctly? Because I'm a bookkeeper, right? then if your contractors are writing on the receipt saying like violet or Sheldon whatever sheet, you know, whatever receipt and then that gets categorized if you look at the receipt that should tell you exactly where that goes but that didn't happen Well, okay. No. So here's some of the issues. ⁓ We always got the receipts and we can always see transactions online. So we always had to match them up. The problem also with the bookkeeper, which I didn't find out for months later, ⁓ was if she didn't know what it was for, ⁓ instead of calling and asking me, they would put it in a separate folder in QuickBooks. or project called uncategorized expenses. Got it. Which I guess they were going to get to later or something. Sure. But it added up to somewhere between one hundred thousand and two hundred thousand. I can't remember because it's been a couple of years, but I remember it was an outstanding amount. And almost all of these transactions were already closed out, meaning that the house had been already built and sold or the fix and flip had already been done and paid out and partners paid out. Yeah. So The only blood would be bleeding from me. Sure. Because ⁓ all those transactions, if they were categorized where they should have been, then the profit would have been lower on each transaction. Yeah. Or sorry, each project. ⁓ And that way. then partners would have a little lower split. Sure. But you could still take the right off for them. It's not the same, but like you could still. It was a tremendous problem. Sure. OK. Because it already happened. Right. Everyone got paid out. And then I found out I paid everybody too much. Sure. Like by a staggering amount. Got it. know, and it was was scattered over like 20 different properties. Right. But, know, let's say it was one hundred fifty grand. Right. Something like that of expenses that were never categorized that I just ate. Sure. So I just gave everybody a bigger split. And that's and that's why I couldn't figure out why do I never have money? It's because I just wasn't organized enough. Yeah, or I didn't take charge I gave myself too much to do or I didn't have time to do the books, right? I could have made time sure but I thought I can just offload that too I thought I was thinking like, you know, you could just hire everybody hire everybody to do stuff and as long as the project's profitable Everything should be fine. Yeah, right. Hey, sounds good in theory sounds good in theory in practice is just tough. Yeah But like you can also take the things you've learned from bookkeeping and you know being organized and you can apply them to the next thing so if you end up getting another bookkeeper, which I don't think you're gonna but like you can just make sure like hey if there's any you can have these conversations like hey Don't put anything into uncategorized or if you do we need to have conversations about it weekly You know what? mean? Like yeah, like these things these conversations need to happen and you've learned what you don't want in a bookkeeper So I think in theory you've also learned what you could enjoy in a bookkeeper. Yeah I've also simplified the process a little bit more to where like, so if I have, I have a couple of different flips going on, like one in Kellogg right now, one in Pulse Falls, each of those contractors are just working on those projects. They're not going from one to the other like before where I had a project manager just all over the place and they got a card and they're just trying to keep everything separate. So for instance, like Joey, he's got my Robin Hood card. And now I know, you know, from a certain date to whenever, whenever this project's closed. all those Robin Hood transactions, can easily just click all, click the material button, which project it goes for, it's done. Yeah. Essentially. Right. And then the same one, I've got an STCU card that I've gave to Paige to finish my Kellogg house with. Nice. And all I have to do is go to that. I get all the receipts from her. I just scan them into QuickBooks real quick. Or I don't even have to scan them in. I just email them. Yeah, that's great. And then I could just like highlight all that. You know in QuickBooks all the transactions click materials done. I mean obviously I'll scan it over real quick to make sure she wasn't going to bardenays or whatever. Right. But it's it's it's that easy. Yeah I got an RV park. ⁓ They they have a debit card for any time they need to go get random supplies. Every time they come I see him once a month they give me a bag of money. They give me my quarters and they give me an envelope that has receipts in it. Nice. ⁓ And then I can see the transactions that they made that match up with the receipts, but I don't have to look that hard I just click all yeah, and then that debit card all of it is just simply supplies for the RV park You're gonna refinance your RV park. Yeah. Okay. Cool. Yeah, I'm refinancing right now I put in my application finally with numerica numerica. Uh-huh. Cool. Sorry to sorry to Devereux I forgot about that and that's interesting too. Are you on a hard money loaner with that right now or no? Yeah. Okay. Yeah, so we have ⁓ but I went So now that I have I have separate projects with separate people. They have separate cards. It's so much easier to do the books. Yeah. Do think that would have been beneficial while you had a bookkeeper though? Like that process that you have right now, do you think it would have made it easier for your bookkeeper to do her job and then not create that animosity between you two? Sure. And I don't think there is much an an anos and anosity until after I said I couldn't afford you anymore. And then I realized just how bad things were after the fact. Like holy crap, this was not worth it. I was spending like almost, you know, ⁓ two grand a month at first. And then when I had way less projects, went down to like 1300 a month. But I just don't see the value in when you could just go to QuickBooks and just quickly categorize the stuff. you still have to relay the information to a human. Why not just go in and quickly just do it and it's done? ⁓ Now I still have someone doing my taxes. ⁓ and bringing everything together. Yeah. But I just don't me personally, I just don't see the value in hiring a bookkeeper because I just feel like it's more of a hassle to not only keep up on one person to make sure they're doing things correctly, but then also kind of verify with QuickBooks to make sure does that also kind of align with my common sense algorithm of what about we spent on this? Sure. It's just you just do I just don't need to trust anybody anymore. Sure. I could just trust Trust myself that, I don't even have to, there's no trust anymore. I just do it. And it's backed up by two different, the receipts and the transactions on the bank accounts and the credit cards that are all synced up. It's just so much easier to just be in control of it. Is it extra work? Yeah, but I think it's super important. It's just my opinion. My hot take is that being in control of your finances as a business owner. is something that you just shouldn't let go of that control that easily. Right. Unless you're on some other level where you. Right. Right. You know, like if it's business, if it's a small business, I think you should be on top of it and just learn how to do it. And it will become quicker and quicker as you figure it out. Yeah. And then as when you figure it out and you're using QuickBooks, they call it QuickBooks for a reason, because it's quick. Sure. It would be harder to hire somebody at this point to have them step in between me and QuickBooks, because they're just going to use QuickBooks anyway. Sure. that's like you're give them access to your QuickBooks because QuickBooks is like the product that's what everybody uses it's just easy for everybody yeah so it just wouldn't make any sense now that I know how it works and how easy it is I don't think I would ever hire somebody to take over that role because it would just be why would I why would I make it more complex yeah you know what I mean yeah not sure if you follow most of its AI anyway right it's it's very It auto categorizes it you just kind of confirm things. Yeah, not sure if you follow chase Perry on Facebook I know you guys had a weird thing, but ⁓ he just fired his bookkeeper and it's it's all AI now So he has AI paying him every time a receipt comes in his email and then it just gets categorized based off what he says And it's like that's easy. It's easy. Yeah. Yeah, that's a different way to approach it ⁓ Quickbooks is just it just seems to be getting better and easier to use. What's the industry standard on this? Like I've tried against bookkeepers. I'm just saying for my experience for your experience, correct my experience. I just don't see the value. Yeah, that's it. And I think a lot of people can a lot of people can't like it's something like I do my own books, but do I see value in like not having to like mess with that system as much as I mess with it because I get lost. Sure. And I'm like, what kind of expenses is this photo video is this like and just trying to figure out like what exactly everything is and how it actually makes sense. Yeah, it's a lot for somebody who doesn't know. That's true. And you make a valid point. There's a lot of people that just don't like working with numbers and they don't like doing it at all. Right. And it might be appropriate for those type of people. I'm weird. I've always kind of liked math. I've always been fine with numbers. Yeah. But I think if you're in real estate investing, most people default to that personality anyway. Sure. ⁓ And I just don't think since the show is more about like real estate investing. Yeah. I think most people would agree with me that it's just easier to manage your own finances. Yeah, somebody else step in and do it for you. Unless you're, unless like you're someone like Sean or a contractor out there that's just like super kind of, you know, bad with money, but great with working and taking action. And if they have someone that they can trust that can just like, Hey, just give me the receipts. I don't tell you which cards to use and I'll manage everything on the backend. That might work great for someone like that. That's just. Just not going to do it. Right. That's not going to do their books. And like it does make sense for someone like me to in like real estate photography. Sure. Like someone who's like busy like 24 7 like like taking time out of my day to be like, I wonder what my expenses are. It's a lot because I'm constantly doing other things. Yeah. And if I can free up that portion of my mind to not think about it, I think it is worth it. But it also depends on the price and value and like there's a lot of factors. But yeah, just just it may be worth it. It may not be worth it. Yeah. Do your own due diligence, of course. And I guess what I'm really just trying to do is just encourage people to not overcomplicate it. Yeah, because it's not that complicated these days. You don't have to sit there with one of those big old calculators that prints off, know, that like prints on its own. ⁓ It's not like that. You don't need like the the the green hat when you're doing it. You just simply need to look at like The helpful thing about this too is you'll catch things that may be like, ⁓ I thought I canceled that subscription. what's this Nigerian charge of $600 through Xbox? That wasn't me. That wasn't me. I think there's fraud. You might catch stuff. like, why did my electrician charge me twice? It was a mistake, but I caught it. Things like that. So I think it's important. Whether you hate it or not to be in charge of your finances if your whole business is to bring in money Sure and like i'm gonna i'm gonna go a step out of like bookkeeping of course because but we talked about this before on either on ⁓ The investor said zoom or on here, but ⁓ I have the same problem with my crm Mm-hmm, right like that thing is so overly complicated Yeah, and like every time I touch it and I open it i'm like, all right, let's crack this out Yeah, like I go into like overdrive and then I'm like clicking buttons I've never clicked before researching like the dumbest fucking things I've ever seen about this website not the basics. Yeah, and then like four hours later. I'm like I did nothing I have no idea what I've done But I know I wasted four hours and like something like that is is kind of how I feel about QuickBooks on the back end like a CRM ⁓ that sucks just like like like I get in and I'm like, what do I do? Yeah, cuz the CRM if you guys don't know that it's the customer relations management system. It's like it's like you're organizing the people in your Yeah, or your customers and you're like that's the organ that's their their data On here and you're organizing it and you're putting up tasks and follow-ups and notes ⁓ And it hurts my brain too. every time I look get into a CRM and start mess with I'm just like screwed Yeah, I don't like I'll just pick up the phone and if I'm slow, right? I found the same trap. Yeah mindset ⁓ So you're not alone there, right? agree you. My head starts hurting too. What I'm getting at is like that is what I would call the distraction. Yeah. You know what I mean? Like it's me thinking I'm going to do good work, but the best work I can do is honestly just working and continuing to serve my people. If I can hire this piece out and like tell somebody else how I need it rent and just push the button for me to do it, that'd be great. Like I'll pay the money. It's the time that I have a problem with. Yeah. Cause I'm trying to have it be like, Hey, you don't want your head to hurt. Yeah. I'm trying to create it have like, create these funnels. So when people click this, I get their email. When I get their email, create them a follow up. Like I'm having it do like a big thing. Yep. That I have no idea what I'm doing. Yeah. Well, I will admit my, my head hurt when I first started looking at QuickBooks for like the first like three years. And I just kind of like kind of putting it off and I had it and I was paying for it I was just like, ⁓ I just like, I don't really understand it. Yeah. And tried to get other people to use it and stuff instead of me. ⁓ I remember my the first job of the project manager that I first hired. I was like, your job is to figure out for QuickBooks. And I put that on my personal assistant too. Neither of them ever did. ⁓ But it's so much easier. Now I kind of know what I'm doing in there. It's just easy. And I actually don't even use it to its full potential either. I just mostly use it to track expenses. ⁓ I don't even bring in any of the income and I don't send out invoices. Like there's so much you can. Only send quick run invoices when people don't pay me through my normal website Yeah, and I have to go after a couple people but it's fine Yeah, and if you don't know what that means sending in invoices like sending a bill to somebody like saying hey you owe me money Yeah, here's an email of an easy way to pay from the easiest way to pay it right with this email link Yeah, so anyway last thing I want to talk about ⁓ My my experience be disorganized and how I've cleaned it up a little bit. Mm-hmm back This goes along with my over-leveraged Nick Beverage trying to do too much. I made the mistake of thinking that it would be more simple to have basically my one main business account, even though I had several, that paid almost all the bills. ⁓ So I would transfer money from all these different accounts constantly to this account and deposit almost everything into this one account to pay all the bills. And... Every so often, like every two weeks, I would say, I would misjudge just how much is coming out and didn't transfer enough money and wind up with overdraft fees. And it got nuts. I mean, in one year in 2021, 2022 ish, like one or two years, I think I had a couple thousand dollars worth of overdraft fees each year. It was happening multiple times a month. And it was completely. Avoidable because I had the money sure it was just I was just trying to pay everything through one account, right? For all these different properties and projects and things I thought it would be easier that way in in 2024 is when I started getting just kind of reset my whole business and got way more organized and just and I also started separating my assets to like smart my Rentals that I had I wanted to make sure that they were in their own LLC's Or or they were grouped into LLCs if there was like less than 250 000 of equity, right? So I try to I followed matt swarmson's rules. Yeah mark kohler and mark kohler. Yeah of ⁓ know that How many llcs do you use for what kind of properties and I and I wound up with like four different llcs basically? ⁓ maybe ⁓ sorry five five. and those properties And then I worked with my property manager to like hey here Here are new bank accounts for these properties. When you get money in, make sure they go to the correct bank accounts because they're separate owners. Even though it's all me. So now I have my trust ⁓ and my trust owns a Wyoming LLC and that Wyoming LLC owns my Idaho LLCs and my Idaho LLCs ⁓ all have their own bank accounts. So does my Wyoming one. So each ⁓ owner of rental properties has their ⁓ income from rents going into that account. And this is the key. All the expenses are coming out of that same account too. Yes. I think that's very important. And these properties, they do cashflow a little bit and it's easier to keep an eye on them. So they're paying for themselves and then I just don't dip into them. Sure. So I'm happy to report it's been a couple of years and I think I've had two accidental overdraft fees. Cool. So like 60 bucks versus like four grand. That's pretty good. Just by separating everything out. Right. ⁓ And so and everything's almost on it's like on auto deposit and auto pay. Yeah. So I do very little bill paying like I just monitor it and I just like categorize it in quick quick books. ⁓ But everything's kind of holding its own weight. ⁓ And it's just been easier to ⁓ make sure that each business, each project has its own bank account. ⁓ And then when there's a problem with one, then it's easier to identify, let's fix that problem or let's sell that house because it's just not profitable. It's not holding its own weight. When before, when I had like 15 different rentals, ⁓ it was hard to kind of tell. Yeah, which ones were worth keeping and which ones weren't because all the money was coming in one bank account and going out the same one. Yep. Now, you know, it I'm in love with a couple properties that I have three of them. There's three properties that really hold their own weight and all pay for themselves. Yeah. And have their own bank accounts. ⁓ And very rarely do I have to like if I need money, I could just borrow from them. Sure. So it's just a different way of doing business, but. Separating your assets Is one one way but you got to complete it by separating your assets and having their own bank accounts where their own bills are being paid They've to be like they're all separated. Yeah, they're all treated Completely separately. I love that. I think that's really good. Yeah, so it's really helped me and I recommend people try it cool. I also recommend That you print out your checklist. Yeah, I'll get on that we can end this now I will print off the checklist As long as everybody has a wonderful weekend and they ⁓ and they hit the little thumbs up button. There's one person out there is like, I'm not going to have a wonderful weekend. Nick's not going to print off a check list. Yeah, you see, don't hit the thumbs up button. Awesome. Well, thanks everybody for joining. As always, like Nick said, leave us a five star review on YouTube, Apple Podcasts, Spotify, or just give us some love in the comments. 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