QUESTION from Jared:
I am absolutely loving the videos and system you have created with Investor Book’s Pro. I successfully have caught up my 2019 books using the system and am using my “rainy weekends” as you mention in the Quick Start videos to fill in previous years (to determine the cost basis of my properties.. and I’m super analytical and want my numbers to match). I’m making my way back to 2016 and almost have everything wrapped up.
For one of my properties I purchased subject to the existing mortgage, the mortgage company escrows taxes and insurance. I cancelled the seller’s insurance and purchased my own at the time of closing. A month after I purchased the property, a disbursement went out of the escrow account to my insurance company. A few days later, the seller’s previous insurance company sent the refunded insurance money to the mortgage company. The mortgage company added the funds to the escrow balance.
I’m not sure where what account to choose in the Escrow register since it wasn’t originally my funds. Initially I thought I would put it in the fixed asset for the property but the money doesn’t go to benefit the property but rather it is sitting in the escrow account. Any advice on how to best enter this? One other way I thought to do is add the refund to the starting escrow balance and call it good. The numbers would work and it wouldn’t impact any of my company financials.
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ANSWER from Mike: watch this 6 min video