Category: Borrow Money

How to Enter Cash Purchase Using a Silent Private Lender

Posted on By Mike Butler
QUESTION from Stacey:
 
Hi Mike,
 
I've watched every video that I have access to, but I am still unclear on how to put in my private loan balances. 
 
For example, I purchased a property last year. I borrowed money from a private lender, account and then paid cash at closing. 
 
I entered the closing statement as a check.
 
Where do I enter the $50,000 loan I'm paying on every month? (I memorized a check I can send every month, but I don't know where to put the balance of the loan.)
 
If I could have help with one of these properties, 
then I am hopeful  I could input the rest of them correctly. 
 
Please advise! Thanks!
 
Stacey
 
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HOW TO VIDEOS, INVESTOR BOOKS, Borrow Money, Closing Statements, Memorized Transactions, Buying

Q&A: Where to Enter Your Equity and Proper Use of CASH from Me

Posted on By Mike Butler

QUESTION from Cassandra:

Hi Mike,

I'm really enjoying your QuickBooksForInvestors system!!

Here's my question....

I have heard you say you don't bother with the Owner Equity account cause you let your CPA deal with that.

You say you use the "Cash from ME" (Long Term Liability) account when you infuse money into your business.

For short term interest-free loans to my business, this concept makes sense to me. But, if I infuse money to buy a property, I believe my CPA will complain because this Long Term Liability has no terms such as interest rate and loan period.

I'm also reading the IRS can easily challenge this and force me to treat it as equity.

My LLC expects to pay this infusion back once I sell the property several years down the road. So, how do I justify using a Long Term Liability account when there are no loan terms?

Also, how do I explain this showing up on the balance sheet as a long term liability when it is not a loan with terms?

Thank you,
Cassandra

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INVESTOR BOOKS, Borrow Money

QuickBooks Question about Closing Statement when Buying

Posted on By Mike Butler
QUESTION from Kyle:

Mike, I get where the loan comes from and how to enter the asset and all that. I did all that fine. I was curious how to get my loan money into quick books and zeroed back out at the end again.

Do I deposit the money from my hard money lender into my checking account then write a check for the purchase out of there?

That's what I did.

Then how do I zero out the loan on my closing statement when I'm done.

I can't get it to zero out under the loan on my chart of accounts.

Do I do it as COG and that's it? I did that but couldn't figure out how to get the loan to zero out under my loan in the chart of accounts. I get the whole post office thing big guy.

Regards,
Kyle W.

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INVESTOR BOOKS, Borrow Money

QuickBooks for Real Estate Question about S-Corp Borrowing Money

Posted on By Mike Butler 2 Comments on QuickBooks for Real Estate Question about S-Corp Borrowing Money

QUESTION from Kyle:

My S-Corp is debt capitalized with a 50K loan. I've spent some on business expenses etc. My s corp now owes the loan money. Also, in my loan agreement, I pay the loan 25% of my NET profits from each rehab I sell. I big percentage, but it's a family loan. Gotta help the fam!!

What would be your best method to set this up in Investor Books to keep track of  the loan and money I spend against it and therefore owe it. And also to keep track and divvy up my net profits after selling each rehab? A video or written reply would be greatly appreciated.

Thank You Mike

Kyle

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INVESTOR BOOKS, Borrow Money