Create Revenue Projections for your Real Estate Business

Real Estate Professionals can have a hard time managing their finances. It’s feast or famine in many cases. You work long and hard on a listing, and the time between commission can be stressful. You will find it useful to sketch out the listings you have, and what the likely outcome is in terms of the commissions you’ll earn. Having this list in front of you will also help you prioritize and stay focused. In short you will want to create revenue projections for your real estate business.

I find it therapeutic actually!

Do you ever feel like everything is out of control?

I do. This process helps me every time.

When you create revenue projections for your real estate business it gives you a reality check on things.

Are you going in the right direction? Are you realistic in your projections? How close are you coming to your projections?

Was your last projection just a thought? As in, “I want to gross $1,000,000 this year?”

Newsflash kid! That’s not a projection.

This is:

The above is a revenue projection that is easy to create and manage.

Each month you want to look at these numbers and see how your actual compares to projected. If you do this monthly, you will see if and where you are way off. Expenses are easy to manage for real estate businesses. Most of your costs are fixed, or easy to calculate (eg percentage of your commission). It’s the revenues (or lack thereof) that kills us.

There is another benefit / reason why you should create revenue projections for your real estate business.

Focus.

If you take my suggestions of not just doing this, but reviewing it every month?

Scratch that.

How about having it up on your screen all day every day?

Wall St. Analysts have their stock tickers and charts on screen all day long.

This is your company’s stock ticker. Keep it open all day every day. Every time you get a new client, track that here.

Keeping your projections up all day will keep your focus on getting new clients, and keep you out of those endless political arguments on Facebook! I keep mine in Google Sheets. It is one of the default browser tabs that opens when I launch Chrome.

How to Accrue Estimated Property Taxes in QuickBooks Online

Most people get their property tax bill and book the entire amount as an expense in the month they received it. This leaves the numbers badly misaligned in terms of matching the expense with the right period. This is why it’s important to know how to accrue estimated property taxes in QuickBooks Online.

You might not notice much difference here on a standard profit and loss. As you’ll see in the video above, it looks terrible when you analyze that profit and loss by month. January will probably show a huge loss for the month, and the rest of the year will show overstated profits (or understated losses). This is because we recognized all of the property tax expense in a single month.

The process to accrue estimated property taxes in QuickBooks Online is simple.

Use last year’s tax bill as an estimate (or increase it, if that is your expectation for the current year. Then record a recurring entry each month (see video for how).

When you get your tax bill, book an adjustment for Dec. The effect will be to change your estimated total property tax expense for the year to the correct total.

You do not need to edit the monthly entries. One entry in December for the difference is all you need. So on your monthly profit and loss, December will look a little different than the other months.

My trial balance adjustment template can help you figure the journal entry to get the balance right.

Any payments you make toward the property taxes should be recorded directly to Property taxes payable. Also, if you’re entering a bill so you can pay the property taxes later, then record that bill to Property taxes payable. If you post payments, or bills to the property expense account, you be overstating your property tax expense, and overstating your property taxes payable.

You accrue property taxes in QuickBooks Online for better matching of expenses in the right periods. This will also “normalize” the data. You should analyze your profit and loss statement on an accrual basis, totaled by month, so you can see what’s really going on with your business.

How to Use QuickBooks Online to Split a Transaction by Property

In my webinar on Accounting for Realtors with QuickBooks Online I demonstrated, among other things, how you can use the “locations” feature of QuickBooks Online to keep track of properties. The problem is, if you need to split a transaction among several properties, you can’t. You can only have one location on a transaction, because the location is tied into the “source” of the transaction, rather than the target. A source is something like the bank account that it was paid from. The targets, would be the expense accounts in the split detail part of the transactions.

There is a solution!

You can actually use QuickBooks Online to split a transaction by property with an extra step. This video will walk you through how to do it.

Don’t forget to post your comments and questions below!

How to Use QuickBooks Online to Record a Hud-1 Final Settlement Statement

I’ve been working with clients in accounting for real estate for quite some time now. I’ve seen and entered many a Hud-1 Final Settlement Statement. During a 1:1 session I had with a client recently, I was very impressed with what he had done. Here’s how to use Quickbooks Online to Record a Hud-1 Final Settlement Statement.

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I’m learning how to use QuickBooks Online to Record a Hud-1 Final Settlement Statement with @nerdenterprises

I taught “Mike” how to use QuickBooks Online to record a Hud-1 Final Settlement Statement. After our session, he replayed the video from that session. He played, and paused, as needed, and compiled a checklist for how to get a Hud-1 entered.

Michael is amazing when it comes to finding the right opportunities, buying properties, rehabbing them. Then he sells them at a nice profit. When it comes to accounting for real estate, well that’s what he hired me for. He may not completely understand the accounting, but I taught him how to record a journal entry. Mike, in turn created a checklist, which he now uses, whenever he enters a Hud-1.

The checklist he made is by no means all inclusive. My suggestion to you, is use it as a guide, and create your own as you enter yours. You may need to account for items, which aren’t on here, and you will find things on here that don’t apply to you.

Watch the video (above) on how to use QuickBooks Online to record a Hud-1 Final Settlement Statement. You will see how to enter the very same Hud-1 that this checklist is based on. You should be able to use the video along with the checklist above as a guide for you to create your own checklist, as you learn how to use QuickBooks Online to record a Hud-1 Final Settlement Statement.

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How Use QuickBooks Online to Record a Hud-1 Final Settlement Statement

How to Use Slack for Real Estate Brokers and Agents

My e-mail signature has a line it it that says, “Onward, and upward, always finding newer and better ways for people to run their business more effectively!” This weekend I was reading about ways to increase productivity. I stumbled across this article that underscores how to use slack for real estate brokers and agents to close more sales. The article was called, “Sealing the Sale with Slack” and can be found right on the Slack blog.

Make it about the people, and not the product. Any remarkable firm, in any industry, who stands out, is consistently finding ways to improve relationships with their clients. It is rarely about the product or service itself. It is almost always about how to make your customers so incredibly happy, they couldn’t imagine working with anyone else. When a customer is that happy, they will tell everyone they can about you and your service. The lowest cost acquisition of new clients is referrals from existing ones. Blow your clients away, and they become the best and lowest cost sales force you could every hope to hire.

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Using slack for real estate brokers and agents is a great way to dramatically improve communications, close more sales, and get more referrals.

To preserve their clients’ privacy, and keep conversations organized, you can name channels according to each property (#1500-Madison, for example) and invite clients as single-channel guests.

You can give your clients a portal through which you can have on going discussions about the deal. Then you can close the deal right there in Slack. Meanwhile you can share documents. This makes it easier to manage everything. Clients have more visibility into the progress, and more immediate input. No need to wait until you can get someone on the phone. Put it in slack, and respond within a few hours. Are you beginning to see the benefits of using slack for real estate brokers and agents?

Using slack for real estate brokers and agents also creates an archive of messages, leaving you with a complete history. No need to search for anything in your inbox. You’ll cut down on your phone time, and increase velocity. This is a no-brainer on how you can increase sales, and improve the experience for your clients.

I was intrigued, especially since I service real estate brokers and agents who want to use QuickBooks Online for their accounting. My clients often ask me, how they might improve their processes. I referenced an article above that tells you how it works. Now I am going to put it into my own words, and give you a video that walks you through how to use slack for real estate brokers and agents. Then you will have a step by step blueprint for how to do this.

There are a couple of things that I can share with you, that will help get you up and running using slack for real estate brokers and agents much faster, than if you try on your own.

The basic setup is simple.

  • Create a new slack channel.
  • You’ll need a paid slack team, to be able to access one very important feature that you’ll need, to make this work.
  • Create a Channel for each listing.
  • Invite your clients with single channel guest only access.

You won’t have the option of inviting single channel guests, without a paid plan, and even when you do, it may not be 100% clear how to access the options. This is why I love video – it explains this kind of stuff so much better than words can.

Once you have your team and your channel setup, you can invite your clients. Of course, if your client is a couple looking to buy / sell a home, invite them both.

If you have several people within your brokerage, who might be collaborating on the deal with your client, then you invite everyone.

Once a channel is set up for your listing, you can begin the fun.

Many people do not want “another app,” but as the article that inspired me to publish this post points out, if it is going to make their lives easier, then they will welcome the idea.

It might not be a bad idea to invite your clients to log in remotely with you.

Inviting your clients to log in with you will enable you to walk them through how to use slack. Once they understand the benefits, they will not resist. In fact, your clients will love how using Slack keeps them in the know.

I recommend using Zoom.us, to make it easy to log in and have them share their screen with you. It is important to have them share theirs, for a couple of reasons.

  • If you share your screen, the client will see all of your channels. Not good.
  • If your client is sharing his / her screen, you can walk them through it while putting the product in their hands.

In a way you are selling slack to your client, even though it won’t cost them a thing. Help them get it set up on their end. Then have them install the mobile app.

Using the mobile app, is the key to creating that anytime, anywhere access communication channel. It doesn’t mean you have to answer the second they post a message. What it means is that anywhere they are, and anywhere you are, a message can be posted the moment the question or thought enters yours or the client’s mind.

Using slack for a real estate buyer? How about posting photos from the mobile app to see if they want to make an appointment to see the property?

I’ll show you how easy this is to do, in the video above.

There are so many places you can go with this, but the most important thing is that you are doing something very simple, for very little cost. Compared with the return on investment, the improvement in the client’s experience with you, will make it worth ten times what you spend in terms of both time and money.

This isn’t about selling properties anymore. It’s about building relationships. These guys in the UK (see article referenced above) understand that. They saw a communication issue in the real estate industry, and they came up with a remarkable solution. Using Slack to improve communications with their clients. They’ve increased sales, and I’ll bet they get more referrals from the clients who have benefited from this improved communication process.

Using slack for real estate brokers and agents to close more sales seems like a no-brainer to me! Want more help? Call me (866) 945-8070 or fill out my awesome, and very brief little contact form called, “Contact Seth.”