Basic Accounting for Foreclosure Investors
Whether you're flipping, holding rentals, or wholesaling, tracking your numbers is critical. Good accounting protects your profits, helps with taxes, and keeps you investor-ready.
🧾 Why It Matters
- Avoid overpaying taxes
- Maximize deductions (mileage, rehab, interest, etc.)
- Stay ready for audits or partnerships
- Know real profit vs. guesswork
- Easier to raise money or scale up
🛠️ Tools You Can Use
- Google Sheets or Excel
- WaveApps (free software)
- Bench.co (outsourced bookkeeping)
- Your CPA (for tax filing)
🏠 Flippers: What to Track
- Purchase price
- Rehab expenses (labor, materials, permits)
- Holding costs (utilities, lawn, insurance)
- Interest on loans (hard/private money)
- Closing costs & commissions
- Lien/tax redemptions
✅ Track every dollar. Your true profit = resale – (all costs + taxes).
🏘️ Rental Holders: What to Track
- Acquisition costs
- Rehab/turnover expenses
- Monthly rent income
- Property management fees
- Maintenance & repairs
- Property taxes & insurance
- Depreciation (ask your CPA)
- Mortgage interest
📉 Track cash flow monthly. Use Rental Cash Flow Calculator to plan ROI.
🔄 Wholesalers: What to Track
- Marketing & lead gen costs
- Earnest money or deposits
- Assignment fee income
- Admin/legal costs (contracts, mailers)
- Transactional funding (if used)
📂 Keep signed assignment contracts and all wire confirmations for tax season.
🧠 Pro Tips
- Create a folder for every deal (paper or digital)
- Save all receipts (scan them if needed)
- Categorize transactions by property address
- Reconcile bank statements monthly
- Ask your CPA about short-term vs. long-term capital gains
📅 End-of-Year Checklist
- ✅ Print P&L report by property or entity
- ✅ Share categorized expenses with CPA
- ✅ Run depreciation schedule (rentals)
- ✅ Calculate holding period for each deal
- ✅ Save a copy of closing statements
👥 When to Hire Help
- You’re doing 3+ deals/year
- You’re wholesaling with multiple partners
- You formed an LLC or S-Corp
- You have investor capital involved
In those cases, consider working with a real estate-savvy CPA and part-time bookkeeper.
📌 Remember: what you don’t track, you can’t claim.
📋 Example Templates
Use these templates to start tracking today:
- 🏘️ Rentals: rent, taxes, repairs, insurance
- 🛠️ Flippers: rehab, loan interest, purchase/sale
- 🔄 Wholesalers: marketing, assignment fees
- 🧱 Contractors: labor, materials, deposits
- 🏡 Agents: commissions, MLS dues, marketing