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Show Summary
In this episode of the Real Estate Pros podcast, host Michelle Kesil speaks with Patricia Oholeguy, a bookkeeper specializing in real estate investments. Patricia shares her journey into the world of real estate bookkeeping, emphasizing the importance of understanding numbers and maintaining accurate financial records for successful property investments. The conversation covers various aspects of bookkeeping for different types of real estate investors, common mistakes made, and the significance of communication in managing finances effectively. Patricia also highlights the balance between aesthetics and profitability in property flipping, providing valuable insights for both new and experienced investors.
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Patricia Oholeguy (00:00)
one of the biggest mistakes that I see is that they, and this is more when they’re doing, I’ve had clients that they tend to do a flip at a time and eventually they get very good and they’re doing two to three flips at a time. And at one point I had a client that they were doing extremely well and they had too much cash out.and one of the properties didn’t sell as quickly as they thought, and they got cash strapped. And then it really became extremely difficult. So one of my biggest advices and one thing that I’ve seen my investors that excellently have done is growing too fast and not always making sure that you have that cash reserve for emergencies when you’re flipping a property. They literally had five properties.
they had one on the market, which they were counting on that to sell within 30 days to keep the other four running. And then they came across an issue with the septic tank and all of a sudden if they were out of budget because they already had just put a down payment on the last property. And so they were like in a really, you they had to like start reach out to people to see if they could get the additional funds to get through so they could finalize it, sell it and move forward.
Michelle Kesil (02:49)
Hey everybody, welcome to the Real Estate Pros podcast. I’m your host, Michelle Kesil. Today I’m joined by someone I’m looking forward to chatting with, Patricia Oholeguy who is a bookkeeper for real estate investors. So excited to have you on the show today, Patricia.Patricia Oholeguy (03:06)
Thank you, thank you. I’m excited to be here.Michelle Kesil (03:09)
Yes, of course, I think our listeners are really going to take something away from how you’re supporting investors and managing their books. So let’s dive in.Patricia Oholeguy (03:20)
Excellent. Thank you, Michelle. So I’m going to give a brief introduction to people so they understand how I got into the world in investments. So it all started with me owning child care businesses and really doing my own bookkeeping for my child care businesses and teaching otherMichelle Kesil (03:30)
Go ahead, yeah.Patricia Oholeguy (03:38)
school directors and how to really manage their books. So that’s how I came really into the world of, know, quick books and all that fun stuff. And once I decided to invest in real estate because I wanted to build my nest egg, that’s when I met a group of investors who had limited language and that really struggled with their computer skills to really be able to manage their books, to be able to understand how their investments were really.working out for them if they were profitable and where the money was going. So that’s when I really became very curious to really understand the books because I was partnering with other investors who didn’t have the skills and so therefore that was the skill I was bringing in. I had to become an Esper overnight on investments in real estate so I started working with bookkeeping experts that worked in real estate themselves to better understand and make sure that I acquire those skills myself and that is how I
ended up really loving the numbers in the world of real estate because at the end of the day when you flip a property it’s all about the numbers and if you can pinpoint how much you spent on tile versus plumbing versus roofing it can really really help you understand where can you really cut costs when appropriate to keep property safe and in good condition.
but not overdo your expenses or to spend more on flooring when you may be able to get just the same quality floor somewhere else for a lower price, et cetera. So that’s really when I realized that numbers were an incredible asset. So I kind of fell into that and I started really helping a lot of the investors within the community, not just the group that I was investing with. And that is how I kind of
took up a little turn and I was like, I really enjoy this. And I decided to make this my thing because I really love it. It comes very easy for me. And I realized that investors that were out in the field working could not keep up with the ability to keep your books in order, keep your cruise going, meeting the deadlines, making sure all the payments are done while you’re flipping to then be able to sell it. And it is a very unique market specifically.
Michelle Kesil (06:48)
Yeah, absolutely. Awesome. Thank you for sharing. So are you supporting all types of real estate investors? Is there like sort of any criteria of the ones that work with you?Patricia Oholeguy (06:52)
Yeah.⁓ I work, ⁓ I have worked with two groups of investors that I currently have been helping with are the typical investors that just buy a property to flip it. And then the typical, and a lot of them are choosing to keep some of those properties at long-term rentals. So those two groups have a little bit of a different need because when you are actually doing books for flips, it’s very different to find the way you do bookkeeping because
When you are doing a flip, all of the construction labor and all the expenses that you have for the property are not considered an expense. They’re actually considered an investment towards the asset of that property. So during the flip, the only way you can see the money is really through the balance sheet, which is a different document from the profit and loss. Because at the end of the day, everything you’re really…
Spending is really cost of goods sold because you’re then selling the house so it’s considered a very different type of Bookkeeping versus a regular business that you just buy material and then you sell out the product So because really you only have one product and it’s not really finished until it’s ready to be sold the how you really don’t have
expenses that can be expensed out because it’s really all part of that cost of goods sold, which is the house. And then that cost of goods that you have been investing in turns into your number, you know, your inventory, which is one unit, right? So that is the big difference when it comes to doing books for an investor. That is very different from doing books for any other type of client. So that is the main aspect that it
that I focus on when you’re doing a flip. The other type of investor that I help are people who actually have rental properties. And this type of investors that I help, it requires a little bit different, again, bookkeeping services or strategy because now we have every house is a project or every house is considering, we categorize them as a project that we have an understanding how much money is coming.
in for that specific property, how much you’re spending to maintain the property, and how much you’re actually earning from rental income for that specific property. So then that requires for you to have, you know you really need to keep your property separate to better understand which property is giving you the most money, depending on the location, on the turnover of your tenants, et cetera. So that even, we call that class.
categorization or project categorization depending on the level of the complexity of the client. If they have too many projects, they have too many properties, we might just do classes. If it’s just a few, we can do projects. So that is the difference between bookkeeping for long-term rental versus a flip. So again, it falls very different from the typical business that you just spend money and then all consider expense.
Michelle Kesil (10:10)
Yeah, absolutely. Thank you for sharing that.Patricia Oholeguy (10:13)
Of course.Michelle Kesil (10:16)
Is there, are you helping investors in every market or just in certain areas?Patricia Oholeguy (10:22)
⁓ I currently work with, I mean, I can work with anyone throughout the country. The only thing I need to have is their HUD statement and have access to their QuickBooks and be able to manage their books. At the end of the day, books are books and I don’t do, as a bookkeeper, we don’t do taxes. I only keep your books manageable and managed for you to be able to give to your CPA to do taxes. I do work with a lot of CPAs.Depending on the client, might be in communication with a specific CPA to make sure that documents are in order the way that specific CPA wants them. But that is based on each client and how they handle their books. And I’ve also had clients that have come in to me after they have completed the flip and hand me all the receipts, all the paperwork, all the head statements, and then I have to go back and kind of create a whole.
spreadsheet and a whole documentation piece so then they can do taxes at the end of the year. I’ve had to do that a few times for a few of my clients as well.
Michelle Kesil (12:00)
Yeah, absolutely. That’s awesome that you’re able to support people in that many ways. Is there? Yeah, good.Patricia Oholeguy (12:06)
Yeah, I mean, it’s again,any business is, you you need without knowing your numbers, you’re not going to know how profitable you are. And I think one of the biggest keys in investments in real estate is you have to understand where every single dollar is going, because every property, even though it’s different, you can kind of learn some tricks of the trade of where you’re going to get the biggest bank for your buck or how you can really split up some of the expenses to make sure that you’re not
overspending because if you’re flipping an old property, there’s bound to be surprises that can really steer your budget in the wrong direction.
Michelle Kesil (12:43)
Yeah, absolutely. think that tracking and knowing what your numbers are is essential.Patricia Oholeguy (12:49)
Yes, so, and so I help clients in two different ways. I have what is called the Wyglaw Services in which I will take over and work with all of your books and give you a monthly report, which I have a couple of investors who are completely hands off. And I have another couple of investors as well who, I have one specific investor who, his wife is the one who does all of the bookkeeping.So, but she needed support. So she’s actually part of a membership that I have for people who are, they own smaller businesses that are not ready to fully delegate their bookkeeping out, but they need additional support. So I also have a membership in which people join on a weekly basis and they work on their books and we actually walk you through how to get your books done in the appropriate way until you’re ready to delegate bookkeeping out to, you know, to someone else.
So if you’re doing your first flip, you might wanna do that. You might wanna have a membership in which you actually learn how to understand the numbers. That way, when it comes to the second, third flip, then you can fully delegate it out and you understand how the finances work, how is it different from regular bookkeeping. And I’m a big believer in the empowerment of investors. That way they’re able to make the best decisions when it comes to investments.
Michelle Kesil (14:15)
Yeah, absolutely. That’s awesome. Is there any sort of maybe challenge or mistake that you find common that investors overlook that you’re able to help them with?Patricia Oholeguy (14:31)
Yes,one of the biggest mistakes that I see is that they, and this is more when they’re doing, I’ve had clients that they tend to do a flip at a time and eventually they get very good and they’re doing two to three flips at a time. And at one point I had a client that they were doing extremely well and they had too much cash out.
and one of the properties didn’t sell as quickly as they thought, and they got cash strapped. And then it really became extremely difficult. So one of my biggest advices and one thing that I’ve seen my investors that excellently have done is growing too fast and not always making sure that you have that cash reserve for emergencies when you’re flipping a property. They literally had five properties.
they had one on the market, which they were counting on that to sell within 30 days to keep the other four running. And then they came across an issue with the septic tank and all of a sudden if they were out of budget because they already had just put a down payment on the last property. And so they were like in a really, you they had to like start reach out to people to see if they could get the additional funds to get through so they could finalize it, sell it and move forward.
So.
very, very interesting to see as we continue to grow in our businesses how we need to be very mindful about having our cash reserves because again, real estate can be a very tricky space to be in.
Michelle Kesil (16:50)
Yeah, absolutely. That is good advice for people.What do you feel are some things that have made the biggest difference in supporting these investors and keeping their numbers in line with where they want to go?
Patricia Oholeguy (17:09)
⁓ I believe having the real ongoing communication because a lot of the investors understand the bigger picture on how to really of how much profit you can really make from that investment. But once they start looking at all the receipts and how things are being spent is when they become aware of some of the leaks they may have in their construction sites. And one thing that I’ve been working with thatclients hadn’t thought of is when I get a Home Depot receipt for example, I’ll be like, is this receipt all for this one property or is there anything you purchase for the other property? So I’m actually educating them as well as making sure that every receipt that we account things for the right project and not just lump everything to this project and like use half of the materials for the other house, et cetera, because that can really impact you knowing which property is really giving you the most return on investment.
So keeping things clean and organized has been a big thing that ⁓ in construction, they’re just looking at the overall ballpark figure. How much money am I? Okay, it’s profit, profit is profit. And I am more into like, yes, all profit is great profit, but I wanna know which property gave you the most profit. And I also wanna know which property gave you the least amount of profit, because that’s the magic of having your clear numbers, because you’re gonna know.
where are you gonna focus on and you’re also gonna learn from your mistakes. So if you don’t know which one give you the least amount of profit, you’re not gonna know what you could have done differently to make sure you maximize profit and examine that property. So I think that the biggest gift that I can give investors is the knowledge of numbers is really data. It’s all about statistics. We say 10 % of people are successful because of bloody, but how do you know that it’s 10 %?
someone went in and collected data to find out that we had a 10 % rate of whatever. So when you are working with flipping properties, managing your books on a regular basis are giving you the profit and loss statement. You get your balance sheet that tells you how much assets you have versus how much liability, which are all the money you actually owe to people. You need to understand those numbers to really know.
what’s really working and what’s the most profitable projects you’ve worked on. You know, if you have a bigger construction company, you might wanna separate things by projects. You need to know which crew is working the fastest, which crew is actually more reliable, and the numbers are gonna tell you a very different picture than what you may see from just looking at something.
So numbers are really the key for you to strategically plan how you continue to move forward. And sometimes you realize some of these projects are not worth doing anymore, they’re just ditched them out. But not until you actually look at the numbers closely can you confidently say, it’s not working.
Michelle Kesil (20:17)
Yeah, absolutely. I think that’s really important. Do you ever feel like people are not fully aware of their numbers and are just kind of winging it?Patricia Oholeguy (20:25)
Yes, 100% 100 % people are not always aware and again they go on by flooring and piping and Roofing materials and paint all in one receipt. So then you forget how much you spent on each area and Then you forgot how much it really cost you to do the floor You forgot to you know, how much you really spent in paint how much you just spent on roofing and gutters, etc. So
Better you need to really keep things organized by areas that will you really understand how much it really costs you to do that floor? Because if you’ve got a great deal on that floor, but then something happened and you ended up Then did you really save money if you ended up having to pay twice as much labor? To get the floor down because it was something odd with the type of tile you bought for the floor, etc So then you have to start but again, how would you know?
that it took you twice as much labor and that you really didn’t save any money on the floor until you actually look at the numbers. Because if you’re not in the project working it yourself, you may not realize that the installation of it took much longer.
So those are all the little things that can really make a difference in a business, in a flip, that you may not care so much when it’s your own house, because there’s a floor you like, this is how you want the house to be done. And that takes me to another point, Michelle, in which a lot of people who start flipping, they’re not thinking about the numbers, they’re thinking about they want the house to look pretty to get sold.
And I think that’s one of the biggest things that I’ve seen in all the trainings that I’ve attended here in the area is investors, especially when they’re just getting started, they fall in love with their project. And sometimes they love the project too much that they might be spend a little bit more than they have to in some of the materials that are completely unnecessary.
and that are not gonna necessarily add value. It’s just something that you prefer because you like the way it looks. And when you are doing this for a business purpose, you need to be very mindful of it has to stay neutral, it has to be clean, it has to appeal to the larger group, not what you like necessarily. spending extra money because you like it is not gonna help you necessarily get more money when you sell it.
And so I think that is a big lesson that a lot of investors at the beginning need to really, really keep in mind is that numbers are important and that, you know, style and decor is important. You have to also keep in mind what the purpose of the property is. Cause I think when people are in it, they forget they fall in love with the house and they’re fixing it as they’re going to live in it. And then
they’re selling it so then they could have saved a few things.
Michelle Kesil (23:36)
Yeah, absolutely, that is so important. Thank you for shedding a light on that.Patricia Oholeguy (23:41)
Yeah, yeah, I walked into a house and one of the investors was really excited because he had put all these fancy lights that did all these different colors in the house. And I was like, wow, I’m like, much did you spend? He’s like, oh, they were all in like an extra few dollars more per light. I’m thinking there’s like 27 lights here. I’m like, why? You’re like, you don’t even know if the future, you know, buyer even is going to notice that they’re not going to pay extra because the lights are super cool.So that is something that, but yeah, he was so proud and he was so happy and he thought it was the coolest thing in town. I think as we are all, we all, think to a fault, fall in love with our own art, you know, and a construction worker is an artist at the end of the day. But when you’re in it to flip, you have to be very mindful that this is not a piece of art. This is a project that has to have a high return investment. Or if you worked
four months and you only made $20,000, you really didn’t make a whole lot of money per month that you were in it. So people just have to be mindful of that piece when they’re really working on construction and not fall in love with the property.
Michelle Kesil (24:55)
Yeah, awesome. That’s important. So before we wrap up here, if someone wants to reach out, connect, learn more. Where can people find you?Patricia Oholeguy (25:04)
Yes, I have a, my company is called Oholeguy Precision Books and the website is www.oholeguy which is my last name, O-H-O-L-E-G-U-Y.com. And if people are curious about more about the membership because they want to be able to do their own books and they want to just learn how to do them prior to handing them off to a bookkeeper, that membership is through what is called the Clarity Compass LLC.com.So you can find that there. And again, if you go to my website, I always have 15, 30 minute consultations free to people. I believe in the value of 15 minute conversation can lead to so many other great things. It doesn’t necessarily mean that we’re gonna have to collaborate on this, you know, as a bookkeeper, but I can connect you with other people I may know. I’m a big believer in connecting with people. It’s gonna help us all grow.
in the end. So I’m always open to having a very brief 15-minute conversation with people if they have questions.
Michelle Kesil (26:10)
Awesome. Thank you for your time and your story. Appreciate you being here.Patricia Oholeguy (26:12)
Of course. Thank you.Of course. Thank you so much for having me.
Michelle Kesil (26:18)
Sure. And for the listeners tuning in, if you got value, make sure you’ve subscribed. We’ve got more conversations with operators like Patricia, who are building real businesses, and we’ll see you on the next episode.
