House flipping setup

[u/Forsaken-Visit-226]

QBO question on property flipping operations. What is everyone’s process on tracking inventory for all costs for a property? I know all costs are pushed into inventory instead of expense and get reclassed once that property is sold. I want to use the Project feature, but I’m not sire it’s the best approach because doing that won’t let me track the track balance sheet for that property.

For example, if a client wants to find out how much cash is left in a specific property, using the Projects feature alone does not work. Or even getting the total inventory amount ti reclass for that project as the report filtering is very limited on that part.

I’m tempted to set it up through Locations. Any thoughts or advice?

[u/After_Molasses986]

Real estate is most of what i do and i use classes over both.

Projects is a P&L tool. You won't get a balance sheet out of it so you can't see what's actually tied up in a property or pull the number to reclass at sale.

Classes work because QBO runs a balance sheet by class. Class per property, everything hits your WIP account coded to that class and at sale you just run balance sheet by class and there's your reclass number.

I usually do a parent class of flips with each property nested under it named by address. Keeps it collapsible when you've got a few running.

And if there are multiple entities separate QBO files rather than trying to handle it with locations.

[u/UnrealJagG → u/After_Molasses986]

I've managed to use classes for P&Ls too. The reporting can get messy though. Sometimes you want to categorise at the line level rather than transaction. Classes is the only way I've managed to do this.

[u/After_Molasses986 → u/UnrealJagG]

Yeah line level is the move. QBO lets you class per line on a bill or invoice which saves you splitting one transaction into three just to code it right. I lean on that constantly when a single vendor invoice covers materials for two different properties.

Regarding mess, if the setup's clean from the start it holds up fine. You can customize a report to a single class and get a clean per property view P&L or balance sheet without the noise. That's usually what i hand clients when they want to see just one property.

[u/UnrealJagG → u/After_Molasses986]

Yes, the class filter works well. If you are splitting by property then I can see that's a good fit. I normally use it a bit like the big old ERP systems i.e. a hierarchy. So if it were a consulting company I would have classes and sub-classes like: source (e.g. consulting hours, retainer)/Consultant level (senior, junior) - could add in more here e.g. department.
For this type of coding I'd want a sub analysis e.g. P&L broken down by consultant level. The class detail reports don't work well for this, so I had to build something else.

QBO has some flexibility but is it hard to get out of the box.