lystn

In this short episode, Tom and Michael share their file organization strategies to ensure pain-free access to all the documents you might need as an investor.  --- Transcript Tom: Greetings, and welcome to The Remote Real Estate Investor. Join with me today is,   Michael: Michael Albaum.   Tom: On this episode, we're going to be talking about the folder structure we use to organize documents. So a very pragmatic and practical weekend wisdom. All right, let's do it.   As I mentioned, this is a more practical episode of weakened wisdom. And this content is brought to you by Roofstock Academy. This is directly out of some of the coaching session conversations that we have some of the templates that we have, we're organizing documents. So this is a great kind of sneak peek behind the veil of some of the content and type of coaching stuff that we do within Roofstock Academy.   Excellent. So whenever I buy a new property, this is the folder structure that I like to use within each property, a folder for tracking or having ready on hand the purchase and sale agreement, the tax bills that come in any marketing collateral, like photos that was perhaps collected during the inspection that I can have on hand to share with my local property manager from the transaction, a copy of the lease and historical leases, the closing statement, the insurance documents, as well as the loan documents and the property management agreement. So a bit of a mouthful. So Michael, any thoughts or other comments on here?   Michael: Yeah, totally. So I think that's a really great way to organize things. So what I do, and I just pulled up my one of my folders, and I'll kind of give everybody listening, a walkthrough of what that looks like. So because I purchased mostly inside of LLCs. And I'll often form a new LLC for property purchases, I'll have all of the LLC documents. So first off, on my desktop, I have something called real estate. And then inside of real estate, I have all the LLC folders. And then within the LLC folder, I have the formation docs for that LLC. So the operating agreement, the articles of incorporation, Articles of Organization, all that all the formation documents, then I'll have property specific information that I can drill down to in property folders inside of the LLC folder.   And so like you, I have the closing statement, all of the marketing materials for that particular property, all the due diligence materials for that particular property, and I'll call that property docks. And then I break mine down into, I have additional folders where I'll have that year, and then insurance and that year and taxes. Because those things aren't static, they're not constantly evolving, but on an on between year to year there, they can be changing. And so I know that if I have to go pull my most recent property insurance Doc, I'll go to 2020 property insurance. And then I can also track it from 2020 2021 to 2022 and see what's been changing and can kind of compare and contrast those quotes. And then also have folders.   I have one right now that I'm working on a refinance. And so I have a refinance folder. So all of the things that I need to refinance that property are going into that folder. So bank statements, income statements, tax returns, all that kind of stuff goes there. And then if it doesn't work out with this particular lender, if I go to refinance with another one, I've got most of the stuff I need there, I'll just have to update bank statements and brokerage account statements, all that kind of stuff. So that's kind of how I have mine broken down. And then I'll put things in multiple places. I was just joking with my wife the other day, I'm a bit of a hoarder. I'll admit that   Tom: Digital hoarder   Michael: Physical and digital hoarder, yeah, by all means.   Tom: So you need some Marie Kondo in your life, does it bring you joy?   Michael: Well, we just spent like, all weekend, this past weekend, getting rid of stuff. And that was a pretty liberating feeling. So I've tried to do that digitally as well. But so I'll put things in multiple places. Because I know if I can't find it, I can just go to a couple different folders and find it. So like, I have another folder that I titled taxes. And again, I'll put the year so for my 2020 taxes, I had a folder where all of the things I knew were going to be part of my tax return or needed for my tax return, I'll put there like property tax statements like insurance documents that show how much premium was paid. And so all kind of double dip and put things in a number of different places for myself. But I think that was a really long and drawn out explanation.   Tom: No it was great.   Michael: I have those same documents on hand that you do the leases and the invoices for that property, essentially, any document associated with that property will be at least in that property folder, and it might be in a subfolder in and of its own.   Tom: Yeah, you know, and if you don't want to get you have like a million different folders. Another way to organize this just to make sure that you have all the documents because sometimes it could be kind of silly having a folder with just one document in it is to have a spreadsheet and then a checklist verifying that those documents are in sort of the the single folder. So a couple of other documents that we left out that we could include is that you have a warranty a home warranty, you are going to want that easily accessible for, you know, hopefully you don't need it. But if you do need it, other ones is major work that was performed perhaps an invoice that's going to be helpful come tax time. And you know if perhaps something, let's say you have work done on a water heater, and then a month later, there's some issue with the water heater, right? So that that kind of gives you some ammunition of going back to the company that did the work saying like, Hey, I just paid for this. Why am I you know, why is it not working? So having that stuff it pays it pays to not be a digital hoarder, but be digitally organized. Being a digital hoarder just makes it take longer.   Michael: Yes, it really does. It really does. And something that I've done I know I've talked about in other episodes is I've got a master Excel spreadsheet with every property that I own inside of every LLC. So I'll have the LLC name at the top, and then the properties in that LLC. And just all of the expenses that I pay personally, are logged in that sheet. And so I've got a record of them on the property Doc, if somebody needs to see that I've got a record for myself to know that I have to give this to my CPA at the end of the year. And then I also have a record showing kind of globally, what that picture looks like, how much did I if somebody said, Hey, Michael, how much you spend on insurance in 2020, I could spend about three minutes and tell you just totaling up from all the different LLCs how much I spent.   So that level of organization is helpful for me, I find that to be really useful. Not everybody will and everybody can, I would encourage everyone to develop their own system, because not everybody learns the same, not everybody works the same. So figure out what works for you. Maybe that's QuickBooks, maybe that's paper documents, you know, a filing system that works for you. So play around with some different stuff. But I would definitely say develop really good habits at the onset, when you've got one or two or three properties because those systems are going to be you're going to rely on them a lot more as soon as you start to scale. Because it does become a little bit more cumbersome if you haven't developed something from the onset.   Tom: And a lot of these templates is a great benefit in Roofstock Academy, and that we have a lot of these kind of pre baked templates for, for this type of stuff, the spreadsheets and, and all of that great stuff. Go ahead Pierre, you were saying…   Pierre: The photographer and the music producer in me just couldn't help but notice that you guys didn't talk about backing up your files.   Michael: Oh, dude, that's so good. All right. So Pierre, you bring up a great point about backing up your files. So I used to work for a property insurance company and we had this like killer IT department and the IT guy was a good buddy of mine. And so all my stuff was always backed up on my work computer. And I didn't really worry about it too much my personal computer, well, I had him build me a personal computer and I was backing up all my stuff, I got my computer stolen like a year and a half ago, and come to find out that my stuff wasn't backed up as well or as robustly as I thought it was. So that was like, I don't know, eight or nine years worth of like stuff and files and organization that I had to redo the vast majority of some of it, I was able to recover but a lot of it wasn't and I like I was in tears for a while. And that was a really big bummer. I would say to put it lightly to the to the PG version. So backup your stuff, whether you use, you know, an external hard drive or something to the cloud, figure out something, but be really, really, really consistent and know how to find it and know that it's backing up and have it backup at some regular interval that's not a year. So whether that's daily or weekly, or hourly, or whatever works, but because having your stuff evaporate really sucks.   Pierre: So the common practice in photography or other media work is that your files are backed up in two places. And your personal computer is not in place. That's liable to crash at any point and you can lose all of your stuff on there. Your files need to be in two separate places, maybe two separate physical locations or on the cloud and on a hard drive somewhere.   Michael: That's so good. That's super good.   Tom: Yeah, so many great relatively inexpensive cloud based storage stuff and external hard drive hard drives are cool but it's like another like thing you know?   Michael: Yeah. And it's it's like another computer like if it drops or breaks or gets wet. Like get your up a paddle, up a paddle without a creek. creek without a paddle.   Tom: Doesn't bring me joy. Well, the cloud brings me joy, but teach their own.   Michael: Yeah. Great. Great point Pierre.   Tom: Awesome, guys. Well, I hope you got some value out of today's weekend wisdom on talking about folder structure. Anyways, thanks for listening. If you enjoyed the episode, please rate us please check out rootstock Academy, all that good stuff. All right. Happy investing.   Michael: Happy investing.