Letts Property Case Study

Cleaned up transcript:

“Myself and my brother, we run a turnkey rental investing business. We buy properties, rehab them, put a tenant in them and then sell that property to another investor and then manage that ongoing. We will probably buy, rehab and sell over a hundred, maybe close to 120 properties this year.

We do some other things – we buy some rentals, we’ll do some traditional retail flips as well. We also own a property management company, so we were fairly up to date in terms of just traditional AP and AR and some stuff on a monthly basis.

But in terms of having our books closed on a monthly basis consistently, making sure that we were caught up to speed so we could review monthly financials and really the structure, the organization and then also some of the higher level items – we were tremendously behind. We were not ready for really being able to look at our financials on a monthly, quarterly basis, ready to get things, taxes filed on an easy standpoint. I’ve run a couple of businesses, and I like things to be very buttoned down. We were a complete mess in my terms. We had a foundation, but we had a lot of work to do.

Our business runs on a lot of expenses, so we spend a lot of money rehabbing our houses. We spend a lot of money in marketing. Money is flowing out the door. And so not being able to see how we’re doing and look and go, ‘Yeah, no, we’re actually making money’ – that’s just a recipe for disaster. As we were starting to really scale up, we would look and go, ‘Oh, we’re out of money. All the money’s gone.’ We just didn’t have very good controls to know when, if anything, we needed to kind of tighten the belt or turn the spigot off in terms of money going out the door.

It’s been a huge impact. I’d say it’s probably over the last year, one of the biggest impacts that we’ve had, and we’ve made some very big changes over the last year, but we would not have been able to do that if it wasn’t for meeting Kristen. To start, she helped us go through a big cleanup project. That took probably 4 to 6 weeks to go back and just make sure that even from a historical standpoint, going back a couple of years, making sure that we were really tightly buttoned up. Then really going forward is setting in a really good cadence and rhythm of when we close our months out, when things are getting accomplished. She’s a great resource to go to for questions that come up or unique situations, how to handle things.

She’s absolutely incredible when it comes to response time. I’ve got a question, her response to ‘Hey, can we set up a call?’ – she’s phenomenal at that. I have found that a lot of folks in the accounting world aren’t very prompt to get back, are very slow at response if even responding, and so she’s been a tremendous breath of fresh air. She’s made a huge impact in terms of we are completely up to date. We close out our months, we have the ability to then review them and it’s been incredibly helpful for us. We’ve made some really big hiring decisions recently and a lot of that came from knowing our numbers. We know exactly where we are and we can feel comfortable to say, ‘Hey, we’re going to step into a couple hundred thousand dollars of new salaries for new team members.’

I think I can’t stress enough that while we haven’t had to do it as much lately, Kristen downplays a little bit in terms of her knowledge and breadth of knowledge. I’ve worked with other bookkeepers – she is incredibly knowledgeable. We can go to her with just about anything other than maybe something our accountant would want to see, and she’ll have either a knowledge base or been able to steer us in the right direction in how we need to handle something.

In the first half of last year, we’ve already outpaced our revenue for all of last year. We should be on track to more than double our revenue from last year. Last year, we probably did around total transactions maybe around 50. This year, we’ll probably do closer to 150, and that’s all types of transactions, whether it’s us buying rentals to flips to wholesaling. We bought some short term rentals.

Our overall volume has significantly increased. One of the things I really like is we’ve done that, but we really haven’t had to increase our manpower. We’ve just gotten a lot better at being very systematic. Now, we’ve increased our manpower with key hires to position us for future growth, but to go from where we were to where we are, we haven’t had to really staff up. We’ve just made some process changes, figured out where we needed to be staffing wise in order for us to handle all of that.

Her professionalism is off the charts. Unfortunately, in today’s world, you don’t deal with many people when you send them something, they can get back to you. And not only can they get back to you, but they can help you solve your issue quickly. If there’s ever follow up needed, she does an awesome job. I’m the kind of person that doesn’t love accounting. That’s not why God put me on this earth. She does an awesome job of just gently pinging us a few days later, a week later saying, ‘Hey, I’m still waiting on this.’ That’s the kind of relationship I need.

I’ve told her in the past that we have a little bit of a higher level of accounting than most folks. She was able to step in and handle that right away. We have talked to at least 10 other firms and they were not really set up or suited or had the ability to handle what we were doing.

I’m part of a group called Investor Fuel, and I think there’s 300-ish members. It’s a real estate mastermind and we meet every quarter. I think last year at one of the meetings, one of my gives was Kristen and her company. I’ll tell you the same thing I told all of them – if you’re looking for a really good high level bookkeeper who has a huge knowledge base, ton of experience, and is just really good at what she does, professional, responsive, really all the things that you’d be looking for – she’s a great choice and great person to work with.”