Sign Arkansas Banking Lease Agreement Template Online

SETTLEMENT CLAIMS ADMINISTRATOR - 5773 Form

my name is Seth David and I started Seth david.com because I wanted a new place to show you how to do the things you need to learn how to do to make your life easier so that you can run your business more efficiently and more effectively and I became famous because I uploaded a lot of videos to YouTube on how to do various things in QuickBooks and a lot of other things and eventually we started getting into specific industry stuff and real estate has been a big one for me so today's video and blog posts is on how to use QuickBooks Online to record a HUD one final settlement statement now if you are here over at Seth David comm by the way you can go down here to where it says industry and you can get a plethora of content that's for fun and for free all for real estate brokers and agents and how to do the accounting and QuickBooks Online for you good folks this is going to deal more specifically with how to enter the HUD one so the first thing you'll want to do is on set Dave comm just click over here to useful links and resources and if you want to play around you can click here on the quickbooks online test drive otherwise you can click quickbooks online login that'll take you right to where you log in to your quickbooks company file now i was very impressed with a client of mine recently who had done some one-on-one with me he had seen some of the real estate videos i had put out on the web and he reached out to me and hired me for some one-on-one training which we did and after i showed him how to enter his HUD one he actually came up with this checklist that he goes through every time he's entering in a HUD one he actually he did this in word you can't actually check off these check boxes so he puts these little forward slashes in as he completes each thing so that he knows it's been handled because he doesn't understand it necessarily from the accounting fundamental perspective like i do he understands it from the perspective of a guy who knows a lot about how to you know purchase property develop it and sell it but not necessarily you know he's not an accountant so for him it's more of a the process and he just wants to follow the procedure step by step so I'm gonna make this available to anybody who wants it for download so you can use this checklist as you're going through your own hud-1 final settlement statements so who's ready to see what this looks like let's go over here into QuickBooks Online and I've already got us set up in my little startup sample company file and I've got it set up with just ten thousand dollars contributed capital into the business so you can see what this looks like all from kind of a clean slate and I've got my same clients permission to use a settlement statement from a property that he actually purchased not too long ago at least as of the time I'm recording this of course I'll have the information obscured by the time you're watching this about you know who the players are here and I'm just going to show you the numbers let me scroll off-screen make my editing job a little easier on that now this HUD one actually is gonna be a little tricky this guy is doing his deals with hard money loans he's not borrowing money from the bank so you get a little non-traditional but that's sort of why I wanted to show you how to answer this with this because when you're doing it where the bank is the lender it's gonna be a lot more straightforward even then what you'll see here the trick first first things first is to get the information laid out in the journal entry form now some of my accounting colleagues are going to say that I shouldn't show you journal entries if you're not a an accounting or a bookkeeping professional because they don't like to have their clients do journal entries me I don't really care I like to show you how to do a journal entry because for a transaction of this nature my opinion is that this is a much cleaner way to book the entry so I'm going to teach you journal entries so let's go to the quick create plus sign and we'll go over to journal entry and we're going to enter a bunch of debits and credits so the purchase price on the surface looks like 43,000 but you're gonna see where that's gonna change actually but initially just lay the numbers out exactly as you see them here settlement ours is 121 607 56 we're gonna break those down a little later on then we have 402 4975 402 1475 total should be 165 Oh 84 70 and it is then we have $165,000 alone and then we have 35 dollars and 15 cents and a credit and then we have 49 dollars and 55 cents ultimately additional money due from the borrower all right now we've got a balanced entry but wait there's more it seems a little weird doesn't it that we have a property that we bought for forty three thousand and then there's charges for three times that amount in connection with the purchase that's because there's really additional amounts that go into this number that are buried in this number and again it's because of the hard money loan thing so we're gonna take a look at that but first let's go back up here and we want to break up these settlement charges and this is very standard they all come from line 1400s so we're gonna go to the second page and we're going to get into the details now you'll have a few sections here in the settlement charges and notice at the very bottom it all goes to line 1400 with that same total so let's go back up here and the first section that we're sort of concerned with here are the items payable in connection with the loan these are loan fees so notice though that we have $90,000 in there the $90,000 was actually a draw you can see it says rehab fund so this is actually a drug on on the loan so this money actually went into his bank account so again things aren't described that well here they're really not it's not a fee it's not a loan fee per se but it looks that way according to this he didn't pay $90,000 to borrow one hundred and sixty-five thousand that would make any sense so you're gonna see how we're gonna deal with that as I go through this so let's deal with the loan fees first actually and what I'm gonna do is I don't need necessarily every single itemized line item within this I don't really care I want the you know I'm gonna actually add everything except for the 90,000 and in the 150 below it because that's rafi which goes directly in connection with the with the draw so I'm gonna just on my other screen real quick and add all the rest of this up now and add up all these numbers again from the 3300 all the way to the $45 I get four thousand five hundred and twenty so let's book that in here weird I need to add some lines here because we're going to need to break this up a bit so this is forty five twenty and then we're gonna put in the ninety thousand and then we're gonna put in the 150 all right so these are all this is loan fees not lien fees this is we're gonna put it into an account called loan escrow and you're gonna see how that works very soon so other current assets and then other current assets again for the detail type save and close and this is really bank fees this is the draw fee so I'm gonna book this to bank charges right so that takes care of the 90,000 on the 150 and everything else that I'm this by the way we're gonna put two one two three Burbank Street that's gonna be a fixed asset in the name of the property right and then within that I'm gonna create a sub-account called original cost I like to do that because if we're going to be rehabbing the property which we will then we need to we then we need to you know I like to show that separately so we have the original cost plus all the improvements or rehab cost that adds up to the total basis in the property so I want other current assets here and other current assets here save so that takes care of that now the 402 14 let's go that we're not done with the settlement charges what am I do it what do I do it ahead of myself alright let's add in some more space here alright so the next section we'll be there's another 11 1061 the designers required by lenda to be paid in advance so these are this is interest expense actually so let's get that in here 1110 61 interest expense and this is gonna be an expense and we do have interest paid save and close and that's 1110 61 back here now we have the title charges so again I'm going to go into my other screen and add those up real quick now when I add up all these numbers from 295 all the way down to the 50 here it comes out to 1640 195 let's go back to QuickBooks put that in and these are going to be the title fee's and if you haven't already set these accounts up these are all expenses title fees is an expense loan fees is an expense loan escrow was a current asset this is also set up as a current asset I put it in other current assets because in this case the property's be treating being treated as inventory it's not something if I was planning on owning it then it would be a fixed asset but since it's really inventory its I'm buying it I'm rehabbing it and then I'm going to sell it so it's really another current asset and these projects don't typically take more than a year which is the other reason for making a current as opposed to long term alright so we've got those title fees in now we're gonna put in the recording fees so again I'm just going to add these up real quick on my other screen when I add up the government recording charges that's from the $60 all the way down to the $60 down here that comes out to 1920 let's put that in recording fees also an expense okay and then we have some additional settlement charges so we're going to call those settlement charges and this is where it gets interesting so we're gonna have the 50 and the 205 which is 255 okay and then here's what I was getting at the very beginning this $22,000 is they call it an assignment fee it's not an assignment fee it's actually an additional amount included in you know that needs to go to the purchase price so we're gonna go back up to the top and add that in so 43,000 plus 22,000 gives me 65,000 that's the true cost of the piece of land that we bought here so that's how we're going to get that balanced and somehow I've gone off by ten dollars or something got added incorrectly here let's go back and see where the mistake is okay so I found one error here which is that when I added up these numbers it should have come to 43 20 which means there's actually more errors that I've made so I got to keep going through this and the other mistake was down here I left out the 210 on these other settlement charges so instead of 255 we need to just add another 210 and now our entries back to being imbalanced and that's always always always always has to be back in balance now let's get rid of this extra line and let's go back and fill in the information for what the 402 14 was let's go back in there that's property taxes okay and then the 75 was water escrow so that's utilities 165,000 is going to be loan payable and I'll do it loan payable 1 2 3 Burbank Street that's the money we owe on the loan and then I have something to explain to you about this having to do with that $90,000 rehab draw and then 35 15 is down here and that's a water prorate so that's also going to go against utilities and then this was the cash due from bar so we're gonna put this into escrow deposits so because what this means is that when all shook out the borrower of my client actually had to pay in another forty nine dollars and fifty five cents and then again just making sure everything balances now next thing QuickBooks Online specifically has the property designation that we could use for location tracking and I renamed it property it comes in initially named I think it's actually named location so you can change the nomenclature on that that's in all those videos that I showed you that are over here on set david.com if you look at the real estate for a real estate accounting for brokers and agents so we can certainly use this to describe the property I'll just say give me one two three Burbank Street and then create that the other thing you can do is use the customers which is this name column that's basically your customer list so I can certainly add that in here and the difference is really just in the reporting that you can do on this stuff that's all it is so if you're not sure you use both figure out which reports you like and whether or not you care about using the property or the customer more the one drawback let me not use the words right back too late I already used it but the one thing about the property is that the property can only be assigned at a global level on any transaction in other words if you want to split a transaction up you only get to book it to one property so if you're if you think you're gonna be in the habit of having to record an amount and then split it up within the same transaction amongst several properties then you definitely want to use the customer rather than the property because the customer enables you you can you can do the split at the customer level you can't do the split at the property level on most transactions except for the journal entry as you're seeing here so of course you want to just copy this down okay and then we'd certainly do the same here for the customer name version of the property I know this was very very exciting for you to watch me do this I suppose I could have paused the recording so we have a balanced answer the only thing you could also do here that I haven't done and will not do in this video is fill in the descriptions I don't want to make you watch me and typing in descriptions for another five minutes so this is how we get the balanced entry now you're wondering where this is going to get offset and where this is gonna get offset and the answer is it's all going to happen through the bank account so here's what happens let's save this I'm gonna say save and close we can also use clasp to track things that's what it just warned me about so we have two things going on here and let's run this balance sheet for today so we have our original cost of 65,000 in the property we have this escrow deposits number and we have this loan escrow number so we'll deal with each one separately first of all the escrow deposits is it's a check he would have to write to pay in now the reason that you so you could if I go back into the journal entry instead of recording it to escrow deposits you could just record it to the bank account you can put the bank account in here I don't like to do that I think it's poor form I don't like seeing journal entries in bank accounts in a bank account as far as I'm concerned there should be deposits and checks or payments of other kinds there should not be a journal entry in there I just think it you know again this is my thing I just think it's poor form so I don't use the bank account or run it through the escrow deposits the other reason for doing this is that oftentimes there is a big lag between the closing settlement date which should be the date of your entry by the way and when a check like that may end up getting written so that's the reason why I run it through the escrow deposits we'll go back to the report summary let's duplicate this so we get it into a new window and then what's going to happen theoretically is he's gonna you know have to write that check for 4955 out of his bank account so let's record a check the payee would be the title cup buddy and we'll do it on the same day and there's gonna be four escrow deposits and four 4955 that's one thing save and close yes refresh the balance sheet and your 4955 is going to zero out and notice it's gone no more escrow deposits wait I hate the fact that this defaults to uh last month okay now there's our escrow deposits four zero the loan escrow is going to be an amount that's going to get deposited into his bank account so let's say a few days after QuickBooks is behaving wonderfully here let's refresh the page again all right I'm just gonna go home add a new transaction bank deposit so again theoretically this would have happened a few days later but I'll leave it on the same day because I'm requirement I'm using today's date as of the day I'm recording this so this is gonna be the loan escrow because this is money that's gonna come into his account the title company is gonna fund him $90,000 so again you know the example that I'm using the the hud-1 settlement statement the company who prepared it did kind of a just a very sloppy job of putting it all together because you know there's a lot of in and out like how did he end up owing $50 when he was getting 90,000 out of escrow deposited into his bank account you know they were just it's almost like somebody wasn't paying attention and just was just dropping the numbers and they could have easily netted this out and just giving him 50 hours less in a way you could argue that this way it's much clearer that he actually drew down 90,000 and ultimately had to pay in an extra 50 bucks but whatever I just think the whole thing was sort of laid out poorly on my client agreed we agreed on this together I you know when we were actually going through it and I was showing him how to enter it so we're going to put that 90 thousand into his bank account because again that's the draw he got on the loan so that he can actually use that money now to pay for the expenses to do the rehab work on the project so let's just go over the reports here then let's go to the balance sheet and today or all dates I don't care and so now notice the hundred thousand I recorded the forty nine fifty five out of the wrong account let's fix that okay so now we have the right amount remember we started with ten thousand dollars of contributed capital we added the ninety thousand making it a hundred but then we just subtracted the forty nine fifty five and if I click in here you can see exactly what I mean there's ten thousand we started with and I wish that would go away and then we paid forty nine fifty five and then we got ninety thousand really really simple I see what it's doing it's giving me a pop up so I can see the missing information on that very nice so that's how we get that ninety nine nine fifty and forty-five cents and notice now the loan escrow is gone so the loan escrow is just again it's a clearing account I used to run those the draw on the loan down so in a sense what's happened here is out of the hundred and sixty-five thousand seventy five thousand dollars was effectively used to pay all the fees in connection with the purchase of the property and the purchase price and then he gets the other ninety thousand to spend on doing the rehab work that he needs to do so that's how it all kind of balances out and then of course he'll need to pay this loan off when he sells the property obviously we're counting on him selling it for a lot more than what he paid plus all the fees plus what he spends rehabbing it you know the ninety thousand so that'll have a nice profit from which to pay this hundred and sixty-five thousand off when he gets the property sold that my friends is twenty minutes actually more than twenty minutes of free video on how to enter a HUD one in QuickBooks Online how do you use quickbooks online to enter a HUD one final settlement statement as always I hope you enjoyed this learn something along the way I hope you're having an absolutely fantastic day and if you need more help just come over here to school of answers.com and sign up for a one one session with me and I can walk you through the entry of your own HUD one final settlement statement and make sure that you have everything you need to get the entry to balance to get the balance sheet right on your books as well as the profit and loss although as you saw this whole thing was really on the balance sheet I can explain all that to you I can walk through your own HUD ones with you and make sure that you're understand exactly what to do and how to get it entered again just come over here to school of answers.com go over to private sessions with Seth you can also hire Harold he's great and we can help you get these HUD one final settlement statements entered and balanced and make sure that your balance sheet reflects things properly accurately and error-free as always I hope you learned something and had some fun along the way I hope you're having an absolutely fantastic day and I look forward to seeing you on the web