What Does a Real Estate Bookkeeper Do? | Real Life Planning Podcast Episode 61

In Episode 61 of the Real Life Planning Podcast, Cynthia Meyer, CFA®, CFP®, ChFC®, talks with Kristen Ambrose, CPA, and founder of Ambrose Bookkeepers, about the often overlooked but vital role of bookkeeping in a real estate investing business. Kristen shares her journey from corporate accounting to entrepreneurship and how her passion for real estate inspired her to serve investors exclusively. They delve into practical bookkeeping strategies, common pitfalls, and how real estate investors can better understand their numbers to make smart decisions.Whether you're managing one rental or scaling a large portfolio, Kristen offers insights to help you approach your real estate financials with a business owner perspective.

“Bookkeeping is what turns your real estate investment into a real estate business.” – Kristen Ambrose

This week on Real Life Planning Podcast:

Takeaway Quotes:

“Don't let perfection get in the way of progress.” – Kristen Ambrose

“Your real estate books are your portfolio expressed in numbers.” – Cynthia Meyer

“You should be able to see how each property is performing—if not, something’s missing.” – Kristen Ambrose

Connect with Kristen Ambrose, CPA:

• Website: Ambrose Bookkeepers
• Kristen on BiggerPockets
• LinkedIn: Kristen Ambrose, CPA
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• Email: podcast@reallifeplanning.com  

About the Real Life Planning Podcast

Hosts Cynthia Meyer and Vekevia Tillman-Jones explore practical steps for real estate investors to build financial freedom and make working for someone else optional.

Episode 61 Transcript

[00:00:06] Cynthia Meyer: Welcome to the Real Life Planning Podcast. I'm Cynthia Meyer with Real Life Planning, and today we are talking with Kristen Ambrose. I'm really excited about this because as a financial planner, I can geek out on numbers and systems and Kristen is a bookkeeper for real estate investors. She's a certified public account, a CPA by training who launched her own business serving this niche population. And boy, is there a need for this. So welcome, Kristen. Thank you.

[00:00:40] Kristen Ambrose: Yes, thanks so much. I'm excited to chat with you today. I can totally relate to geeking out about numbers.

[00:00:45] Cynthia Meyer: So tell us what's important to know about you.

[00:00:48] Kristen Ambrose: Sure. I studied accounting in college. I got my CPA license shortly after I graduated, like you mentioned, I started my career at PWC in the audit practice, working mostly with insurance clients. Didn't really love auditing, so I moved into financial consulting. I worked at a firm in New York City that I really loved. We specifically worked with small businesses, helping them clean up their financial records and then help 'em set up their financial bookkeeping and accounting process for a monthly close every month. So, during that time while I was working there my husband and I started investing real estate.

[00:01:24] During 2020, we had some more free time at home.

[00:01:27] Cynthia Meyer: Good time.

[00:01:28] Kristen Ambrose: Yes. We just dove into all of the BiggerPockets content, learning as much as we could. And then we bought our first duplex in New Jersey during that time and we house hacked that property and we actually still live there today, five years later.

[00:01:41] Cynthia Meyer: Oh, fantastic. Is this your first home or your first just your first house hacked?

[00:01:47] Kristen Ambrose: No, actually we owned a house before this; a large house near the suburbs of New York City because we both worked in the city and we spent a lot of money on that house. We thought it'd be for our forever home.

[00:01:58] And we were sitting there, we're looking at each other, we're like, we have a giant four bedroom house that we're not using. What are we doing? Like we're spending so much money on this. So we sold that house. Basically broke even on it and then ended up buying the duplex instead. And with the money that we had from that one large house, we ended up buying a duplex and three long-term rentals.

[00:02:16] So it was- we were just like, oh, we should be a little bit more and smarter with our money.

[00:02:23] Cynthia Meyer: I think that's a really savvy decision. Certainly if I could go back and give my my younger self piece of advice that was related to finances, it would be to househack. It's a brilliant way to get started both as building home ownership and your real estate investing portfolio all in one fell swoop.

[00:02:42] Kristen Ambrose: Yeah it's been the reason I could start Ambrose Bookkeepers because we had such a low cost of living that I could actually finally make that jump from corporate America to start my own business. The goal has always been to work for myself. Started Ambers Bookkeepers about two and a half years ago with the intention of providing really high quality bookkeeping just to real estate investors. Kind of wanted to combine my two passions of real estate and accounting. And yeah, I absolutely love it and doing my favorite parts of accounting and I'm working with my favorite group of people, real estate investors, so it's been the best.

[00:03:10] Cynthia Meyer: What do you like most about working with real estate investors?

[00:03:12] Kristen Ambrose: I love the population of people that we're working with. They're also driven. They have similar goals of trying to generate wealth for their family, and they're passionate about what they're doing and it's just a group of people that I resonate with, so it's fun that we get to work with them.

[00:03:28] Cynthia Meyer: You said you'd always wanted to work for yourself. Let's unpack that a little bit. Tell me more about that.

[00:03:34] Kristen Ambrose: Yeah, so I always wanted to work myself in the sense that I wanna control my own time. I. I had great experiences in corporate America. I worked on great teams.

[00:03:43] I actually really loved my last job, but it's just at the end of the day, I wanted to be able to set aside certain time for my family whenever I wanted it. We can now travel and I don't have to ask for permission for time off. I can work nights and then make sure I have like afternoons with my son.

[00:04:00] So that's always been the goal and it's just been amazing now that I have that flexibility.

[00:04:05] Cynthia Meyer: So tell us a little bit more about who you work with and the kinds of things that you do for your clients.

[00:04:12] Kristen Ambrose: Yes. So we work exclusively with real estate investors. I get inquiries all the time for other businesses and I'm like, Nope, we just wanna work with the real estate investors.

[00:04:20] Some of our clients, they have another like side business will help 'em with that. Mostly like long-term rental owners. Short-term rental owners. We work with a lot of flippers, some realtors and what we do is mainly monthly bookkeeping. And that's always gonna start with a cleanup, inevitably, unless you had a really good bookkeeper beforehand.

[00:04:37] We're gonna clean up your books, get everything organized so that we can run reports by both business and by property. And then from there, we're gonna set up a good monthly bookkeeping cadence where we're getting on a regular schedule of categorizing all your transactions, reconciling your bank and credit card accounts, and reviewing your financials monthly. So we review balance sheets and P & L with all of our clients monthly. So they really understand how their business is performing, and they have the data to make decisions as they grow.

[00:05:03] Cynthia Meyer: So I think it's so important that we work only with real estate investors at Real Life Planning and this is a common area that I see needs work with client populations who are otherwise doing really well for themselves. They're building and scaling a large portfolio. A big chunk of our clients are already work optional. They're professional real estate investors that are living off their real estate business and I see people, when it comes to tax time, I see that people have made mistakes. They've forgotten an expense or they haven't organized their books according to the way their accountant would like to look at them or they've co-mingled personal and business finances.

[00:05:44] Kristen Ambrose: Definitely. It's it's almost surprising how much bookkeeping's like on the back burner for a lot of investors, and I get it. It's not the exciting part of running a business. I think they're so focused on yeah, acquiring that next deal and doing deal analysis before they get the property. Once they actually have the property in their portfolio, a lot of people are just forget to look at the numbers afterwards.

[00:06:04] I think bookkeeping's really what takes that investment from just an investment to a business. So understanding how that property's performing. How much income is it generating every month, revenue and expenses, I hear all the time from potential clients like, oh yeah my property should be cash flowing. On a napkin, the numbers make sense, but I have no money in my bank account. So we help them understand that where's the money going, and especially there's instances where maybe you have 15 long-term rentals and you're, I don't know, making $ 5,000 a month in cash flow. And then we'd run all, we figure everything out for you by property and you realize, oh, I could sell a few of these and I'll be making more cash flow and managing less properties.

[00:06:45] It's helping our clients get some real data so that they could make decisions or learn from what's going on in their business.

[00:06:53] Cynthia Meyer: I think that's so important. Kristen. When I teach other financial planners in the Real Estate Financial Coach Course, I invite them to think of real estate owners as business owners.

[00:07:03] It might not be on your Schedule C business profit and loss on your tax return but real estate doesn't run itself. It's not really passive. It's just treated as passive income in the tax return and consequently, if you think of it as a business, whether you own one rental property or 27, that helps you make better and more informed decisions.

[00:07:25] And you need numbers for that. You need to be tracking and measuring.

[00:07:29] Kristen Ambrose: As an investor myself, I know... it's not that.

[00:07:31] Cynthia Meyer: Are you managing your own doors? Do you have property managing or no?

[00:07:34] Kristen Ambrose: We have property manager in Florida, and then we manage our own property in New Jersey.

[00:07:38] Cynthia Meyer: If you are watching or listening to this conversation and you don't have a bookkeeping system for your real estate business right now, how can you get started?

[00:07:52] Kristen Ambrose: So I would say, you highlighted on this before. First, let's focus on separating those personal and business transactions.

[00:08:00] Make sure you have a business specific account, a business specific email. That'll make your bookkeeping way easier. So once you have that down, I think we use QuickBooks online for all of our clients. We really love it. It's a great software because all tax CPAs are familiar with it, but let's just say you're, you have one or two rental properties, it might not be time to purchase a QuickBook subscription.

[00:08:20] So I think it's totally fine to start in Excel. Just basically you should be tracking all of your income and expenses by property and the way to do that is once you have that specific business bank account, credit card, you can just hold those statements into Excel and categorize each of the transactions on there by property and putting them in the correct bucket of revenue and expenses.

[00:08:42] So I think that's a good way to start and I think that can work.

[00:08:45] Cynthia Meyer: Sorry to talk over there. So if if you're categorizing expenses, do you have a specific way you like people to categorize?

[00:08:52] Kristen Ambrose: So we use the same chart of accounts for all of our clients, and that's based on the tax return. That's based on feedback we've gotten from taxi CPAs.

[00:09:00] That's what we use and that's what I would recommend using is and a lot of the tax CPAs will send you a form at the end of the year to fill out. I would just use that form that tax CPA sent you to categorize your expenses. That way you don't have to do a remapping at the end of the year. Everything's already in the format that you need it.

[00:09:18] Cynthia Meyer: So if you're creating expense categories for yourself that are the categories on Schedule E with maybe some subcategories in that, if you wanna track them separately, like how much electric versus gas, for example. Then you should organize them in your accounting software that way.

[00:09:33] Kristen Ambrose: Exactly.

[00:09:33] Cynthia Meyer: Okay. And so what are the things that you tell your clients to track every month? The metrics of health or things to pay attention to in the real estate.

[00:09:44] Kristen Ambrose: So we get, get them into the habit of reviewing their balance sheet and P & L every month. Of course, more clients are interested in the P & L ,so that we can see how each property is performing.

[00:09:56] So we're looking at that cashflow every month by property. And we're also looking at any admin expenses, every single month to see, because those kind of sneak up on you. There's like a subscription here, a subscription there all of a sudden. Your admin expenses are the reason that your cashflow is down. So it's really just a matter of getting them in the habit of looking at it that leads to much easier decisions to be made for their business. So it's pretty simple metrics, really.

[00:10:24] Cynthia Meyer: As somebody's business grows, what signs should they be looking for that it's time to go see a professional bookkeeper?

[00:10:33] Kristen Ambrose: Yes. So I think a lot of people can relate to the feeling of being like so overwhelmed about their bookkeeping. Feeling like they just cannot stay on top of it. They're always months behind, sometimes clients or even years behind. If that's you and you can't get on top of it, it's probably a sign you should outsource. Also, if tax season is super stressful every year that's a good sign you should outsource. And also if- I have some clients that come to me that are so organized with their bookkeeping, they're doing an amazing job, but they're like that's taking away time that they could be spending getting that next deal. So that's also, if you feel like you don't actually have time to be spending on the other activities in your business, that's also a good time to outsource bookkeeping.

[00:11:11] Cynthia Meyer: And so a way for an investor who might be a CFO if so to speak of their real estate business, and they're keeping good records and they're fine at tax time, but it, it, it's time consuming, the more doors you have. It's time consuming to reconcile your books every month and it's a way to buy back your time.

[00:11:28] Kristen Ambrose: For sure.

[00:11:29] Cynthia Meyer: Yeah. Okay. So what are some signs that their current system or their current bookkeeper isn't serving their real estate portfolio very well?

[00:11:39] Kristen Ambrose: If you have a bookkeeper and you still feel like you have no idea what's going on in your business, that's a red flag, something's wrong.

[00:11:44] Cynthia Meyer: Yes.

[00:11:45] Kristen Ambrose: You should be able to have a clear picture of how your portfolio is performing by property. Also some things I see all the time that maybe a generalist bookkeeper doesn't understand about real estate is how to book a closing statement. I have some flippers that are sending me closing statements a couple a weeks. We're looking at those a lot. We're experts in closing statements.

[00:12:04] So really what I see all the time is someone's taking like that net cash at the bottom and they're booking it to, like buildings for a long term rental, or maybe they're booking it to gain or loss on sale for if it's a sale and that's not right. You need to look at every transaction on that closing statement and categorize it appropriately. And the type of investment, it's gonna depend on where it goes. And so, that's something you should be looking at. And then, I think also things that we run into a lot are like things with some creative loan strategies and things like that. I see a lot of mistakes in that area where maybe principal interest and escrow aren't broken out. Construction draws aren't booked properly. So just making sure that your bookkeeper has a good understanding on those types of things.

[00:12:44] Cynthia Meyer: And it's so important to work with a bookkeeper who understands the type of real estate investing that you are doing. For most people, it's going to be long-term rentals or short-term rentals.

[00:12:55] Some people are developers. They're buy and renovate and sell, for example a, what we call flip. Or maybe you're a lender, right? Maybe you're lending hard money to somebody else, or buying tax liens, whatever. Or wholesaler, that's a whole new level of complicated. So somebody that is a real estate savvy bookkeeper, it's certainly in our financial planning business. We use somebody to keep our books that keeps books for fee for service financial partners. Makes it a lot easier for me. I'm not going in there and having to reconcile the books.

[00:13:28] Kristen Ambrose: And you don't have to answer the same questions at the time. What is earnest money again?

[00:13:32] Cynthia Meyer: So what is the number one mistake that you see real estate investors make with their books?

[00:13:39] Kristen Ambrose: I do see a lot of the mixing the personal and the business. That's, yeah, one issue. I actually find like once you are taking your bookkeeping seriously, once you're making it part of your like scheduled business habits, you are not gonna mix business and per personal anymore because every time you go to use that business card for personal transaction, you're gonna be like, oh, my bookkeeper is gonna ask me about this. So you start to learn pretty quickly once you are really in the weeds of your bookkeeping, but, so there's that. And then like I mentioned, the closing statements being booked incorrectly and that has such a large impact on your business as well, because if you are not appropriately capitalizing and expensing the transactions from your closing statement and your everyday transactions, as well, you can't send that data to your tax CPA, they're gonna send it back to you, or they're gonna use incorrect data to calculate your depreciation. You're losing money on potential tax savings by not doing it correctly.

[00:14:34] Cynthia Meyer: In our practice, we often see that people are very concerned about asset protection and they set up an asset protection structure with an attorney, for example. It's fairly straightforward. They're putting their rental or rentals in a limited liability company and sometimes it's much more complicated, right? Where they have an LLC for each property. They may have may have a C corp at the top if they're flipping properties, for example is a common structure, some types of S corp and they don't keep their corporate structure. You work with folks like that, like how do you get them cleaned up and then to a point where in every dollar that comes in and every dollar that gets spent is appropriately in the right place and accounted for.

[00:15:24] Kristen Ambrose: I see this a lot, too, and eventually once we have everything cleaned up, which we could talk about how we do that, but we really are encouraging them to do it correctly going forward. But if you didn't do it correctly in the past, we just- we meet with our clients right before we start any bookkeeping to really understand their entity structure because I don't wanna go back and fix it.

[00:15:45] So we get a really good understanding of their entity structure and then sometimes we have to meet with their tax CPA or lawyer too, to really understand it if maybe they can't explain it to us. Then if we understand, okay, this property we have a holding company for this property. We have an operating company for this property. Then we make sure all the expenses, the operating expenses, are going through the operating company. And then we have the asset balance, the fixed asset, in the holding company. The good thing is QuickBooks is really flexible in the sense that like we can do reclass transactions however we need to.

[00:16:15] So we get the cleanup done and then we encourage you to make sure you're doing things in the correct entity that you're supposed to.

[00:16:23] Cynthia Meyer: For people who like numbers like we do, the doing things in QuickBooks online is not as daunting, especially if you've had an accounting class in college, for example, and, the basics of how accounting works. You don't have to be an expert, but to the person who does not have that- any accounting knowledge, they often find that doing real estate and QuickBooks is really difficult and complicated. Those folks to get comfortable with it.

[00:16:52] Kristen Ambrose: Yeah. So QuickBooks is amazing in the sense that it's supposed to apply to all different types of industries. So it can be a little daunting to get the real estate set up in there, but they have so many- it's so robust. There's so many fields that we can use. So what we do is we always recommend the plus subscription of QuickBooks.

[00:17:08] That way because you really need that class field. So we use, there's a business field, it's also called location. You can change the setting in QuickBooks to rename it. We name it business and we use that for all the different entities. And then the class field is what we use for properties. And I would really recommend using both of those fields for all of your transactions. A lot of people will come to us with, they try to like finagle, finagle it to work a different way and the best way to do it is business in class. And then having a real estate specific chart of accounts so that you can book your transactions and yeah, it's, once you have it set up, it's very easy to do going forward. That's what we recommend.

[00:17:44] Cynthia Meyer: So it certainly sounds like that even if somebody plans to keep their own books going forward, having engagement with a real estate savvy bookkeeper to help them get their books set up correctly at the beginning and teach them how to keep it as it could be useful. Is that something that you do in your firm?

[00:18:00] Kristen Ambrose: It's not something we currently do just because demand is a little too high right now. It's like toggling between where we can spend our time. So right now we are working with people who just want monthly bookkeeping, who just wanna outsource it.

[00:18:12] But that's something I hope to do again in the future. That's also something on my, like bigger plan of the next year or so, is to do some sort of client education because I get that question all the time is like, how can I do it myself? So I do wanna be able to offer something like that, but it's not something right now.

[00:18:26] Cynthia Meyer: So what is the bigger plan?

[00:18:28] Kristen Ambrose: Right now, I have two full-time bookkeepers who work with me and we're doing monthly bookkeeping for about 30 clients right now. And I love it. I'm so happy. I love just having that personal touch with clients. I like that it's, it feels very personal to them.

[00:18:42] I wanna maintain that structure; grow it a little bit and have a small but mighty team of bookkeepers who are all interested in real estate and it's just very real estate focused community. And then, also I would like to add that education piece. because I that question all the time and I hate that I can't like address that need. So that's next on the agenda as we grow.

[00:19:02] Cynthia Meyer: Keep us posted about that. If somebody's listening today and they're frustrated with their bookkeeping system or the transparency that they're not getting about their rental property business.

[00:19:13] How should they look for a real estate savvy bookkeeper?

[00:19:18] Kristen Ambrose: Yeah. Making sure you're asking the right questions is I think key to under to get to make sure that the bookkeeper understands. And even like when I was hiring bookkeepers to help me with my firm, it's like I would ask specific questions like, okay, how would you book a closing statement? Can you explain to me what earnest money is? Just like a simple question like that. They don't know the question ahead of time. It's a pretty clear indicator of whether or not they understand real estate. Another one I get a lot is like how do you book a construction draw that seems to stump a lot of investors that are doing their own bookkeeping. Just making sure you're asking the right questions ahead of time. And then also maybe asking for specific examples of real estate investors they've worked with. I also love to bring up like actual reports to show real estate investors. This is what your reports should look like and so, that could be something you asked for, as well.

[00:20:05] Cynthia Meyer: Sometimes people don't know the difference between what they would use a bookkeeper for and what they would use a tax CPA for. How would you break that down?

[00:20:14] Kristen Ambrose: Yes. So I think this does confuse a lot of people because I get a lot of tax questions. And I am a CPA, so I understand.

[00:20:21] Cynthia Meyer: Wait, so you could answer them?

[00:20:23] Kristen Ambrose: Yeah. Yeah, one of the largest advantages to real estate is taxes and you wanna be going to an expert just like you want a real estate specific bookkeeper, you also want real estate specific tax CPA who's gonna help you take advantage of everything. What I say is the bookkeeper is really building the foundation of your books. They're gonna help you tell the story of how your business is doing. What you're doing in your business, how properties are performing, and then that gives you the ability to bring that to your tax CPA and have really thoughtful conversations about strategy and filing your taxes.

[00:20:51] And I meet with my client's tax CPAs so that we're on the same page. When you have your bookkeeper and your tax CPA on the same call, it really makes your life a lot easier.

[00:20:59] Cynthia Meyer: But maybe your financial planner?

[00:21:01] Kristen Ambrose: And your financial planner, that's very true.

[00:21:04] Cynthia Meyer: What are some of the things any real estate investors should be doing with their bookkeeper on a monthly basis?

[00:21:10] Kristen Ambrose: Yeah, so your bookkeepers should be categorizing all of your transactions every month. Reconciling your bank and credit card accounts, which means basically like whatever your accounting system or bookkeeping system says your bank and credit card balances, that should match what's on your statement.

[00:21:24] And I think I see this, that's a mistake I see a lot too, is either they're not reconciled or they're reconciled with a difference, and it's off by $30. But then you dig into that $30 and it's 20 transactions that were missed. So you wanna make sure they're, all of your accounts are reconciled to zero every month.

[00:21:38] And then that you're reviewing your financial statements every month at a minimum. We're doing a balance sheet and P & L some of our clients have some kind of custom reporting that they want. They wanna see like certain properties grouped together, whatnot. We are happy to accommodate that, as well.

[00:21:51] So at a minimum, it's making sure you're looking at it every month just getting into the habit of it.

[00:21:58] Cynthia Meyer: What's next for you and your husband in your real estate business?

[00:22:02] Kristen Ambrose: That's a good question. We are really focusing on the bookkeeping business right now. We would love to get a bigger house hack maybe.

[00:22:11] Right now our, it's like a duplex, both apartments are like 700 square feet. So as our family grows, we would love to be a little more space into a bigger house. Space. Space. Yeah. Even we like the idea of maybe doing a house with some sort of a ADU, mother-in-law suite for a short-term rental, potentially.

[00:22:24] So that's what we're looking at next. But right now the focus is certainly on the bookkeeping business, too.

[00:22:30] Cynthia Meyer: So you are, you're investing in yourselves.

[00:22:32] Kristen Ambrose: Oh, sorry. You said we're investing ourselves?

[00:22:35] Cynthia Meyer: You're investing in yourselves and the growth of your entrepreneurial venture.

[00:22:40] Kristen Ambrose: Yes.

[00:22:40] Cynthia Meyer: So we always tell clients, I always tell clients, when you're thinking about your broader investment policy, right? That, that it, that isn't just your securities, right? That's not just, what you have in stocks and how much you have in bonds, it's how much you reinvest in yourself, and your ability to create income for yourself. And it's how much you invest in other income producing businesses. Are you investing in real estate? Are you investing with, for example, in venture capital in somebody else's business? So I invite financial planners to broaden their idea about what investing is because people do invest in different ways and hopefully they've got a diverse portfolio of income generating activities not just ways that they're protecting the wealth that they've already earned.

[00:23:24] Kristen Ambrose: That makes sense. And also just like investing in your time and your ability to live a life that you're excited about. That's like where we prioritize our investing, as well.

[00:23:33] Cynthia Meyer: Yeah. So what do you think your generation views real estate differently than say your parents' generation?

[00:23:42] Kristen Ambrose: Yeah, I think, so both my husband's parents and my parents have lived in the same house for over 30 years. Whereas I think our generation maybe is a bit more flexible to hop around and that has to do with the ability to work remotely, as well. I know that my husband and I have lived in four different places in just like 10 years.

[00:24:01] So I think our parents generation had the right idea in the sense that, that's how you build wealth is through real estate, is to hold it long term. If you hold it long enough, you're gonna, it's gonna be benefit you financially.

[00:24:13] Cynthia Meyer: That's right. The real estate cycle is longer than the business cycle. To have the full benefit even as an investor, not just an homeowner where you need to own something for like at least 20 years.

[00:24:21] Kristen Ambrose: Yeah. So they definitely had the right idea there. Then I think, it's tough because it's like the housing market is so crazy right now, so all of our friends are at the age where they're buying a house and it's it's very expensive. I don't know. I guess that's a good thing to learn from our parents generation is to buy it and hold it.

[00:24:35] Cynthia Meyer: Interestingly, there's a lot of research that's come out over the past five to six years where organizations like Bankrate and NerdWallet, for example, on the Pew Research, have done surveys by age of folks as what they think is the primary driver of investment growth. And for people under 50 they say real estate, right? They do. It used to be, the older somebody is, the more likely they are to say stocks- the stock market. But the younger somebody is, I like to say that's the HDTV effect. People also think it's easier than it is.

[00:25:10] Kristen Ambrose: Yes.

[00:25:12] Cynthia Meyer: Properties magically just renovate themselves and there are no permits. Oh yeah. There's no issues. But the idea that real estate is an important component, a growth strategy to actually try and accumulate wealth over your lifetime.

[00:25:26] So it shows up in a really different way and I think more more people are thinking about things like house hacking and building investment portfolios and certainly the number of folks that own investment properties has risen over time. About 17 million house tax paying households in the United States that own investment properties.

[00:25:43] So most of those people are mom and pop landlords.

[00:25:45] Kristen Ambrose: Yeah. That's amazing. I definitely agree with the house hacking aspect, as well. I feel like my parents were always like, oh, we should have done that. That's cool.

[00:25:52] Cynthia Meyer: Yeah. My husband Steve and I, we started buying properties during the Great Recession in part because we'd been big accumulators and investors mostly in securities up until that point. Although we'd each had our own businesses at various points. But, as the numbers at the end of your net worth get a little bit bigger. Also, when you have a big market downturn, that number looks a little bit bigger. That was a big wake up call for us. We said we really need to diversify out of just securities. And it turned out, of course, that turned out to be the best financial decision of our lives. Helped my husband leave his corporate executive job in his late fifties and for me to start this firm focused on real estate investors.

[00:26:33] Kristen Ambrose: Yeah. That's amazing. That's why I do, I also work with a financial advisor that specialize in real estate too, because it is, so important to diversify and yeah, look at your portfolio like holistically. It can be easy to get, especially like depending on the type of person you are like if you like to just focus on one thing, it can be easy to forget that there's all these other mechanisms you should be thinking about, as well.

[00:26:55] Cynthia Meyer: So what are some of the things that you're curious about right now?

[00:26:58] Kristen Ambrose: So I think with the rise of all the AI and all the new tools and softwares, it just my husband is certainly really interested in those types of things. So he's always researching things and that we can use to improve the firm and the services we're offering to our clients.

[00:27:14] He'll end up doing lots of research on it and then I try to implement it, see what I like, see what I don't like. So that's something we're always curious about is how can we better serve our clients and be more efficient and just the different types of softwares that are popping up. I feel like there's so many real estate specific softwares right now that don't have the best bookkeeping functionality.

[00:27:31] So I'm staying on top of those to see if anything pops up that can really give that full picture of property management, rent collection, repairs, maintenance and bookkeeping. Right now, we haven't quite seen that, but I'm interested to see what's coming out.

[00:27:45] Cynthia Meyer: Best piece of advice that you've ever received?

[00:27:49] Kristen Ambrose: I dunno if it's advice I probably heard on a podcast somewhere, but don't let perfection get in the way of progress. I think, as an accountant, I can be very everything has to be, there's a right answer in accounting, which is why I love it.

[00:28:00] Like everything has to be in the right place. But there's never gonna be a perfect time or way to do things, essentially. Especially with investing, like there's never a perfect time to buy real estate. You're like, oh, I'll buy it when the market goes down, or whatnot. So it's, and then the same thing with the business. It's oh, like maybe I can't start the business right now because I want a little bit more saved up or something. There's never a perfect time. Don't let perfection get in the way of progress. Like small everyday action is really how you see growth.

[00:28:26] Cynthia Meyer: That is the attitude of an entrepreneur.

[00:28:29] Before we ring off, let's a little bit about what in the market for real estate investors right now. Where are do you see opportunities?

[00:28:40] Kristen Ambrose: I feel like I, as far as investing opportunities, is that what you're asking?

[00:28:47] Cynthia Meyer: Just where do you see opportunities for real estate investors, right now?

[00:28:50] Kristen Ambrose: I'm biased, but I see opportunities of investors focusing on their own portfolios. I think everybody's hyperfocused on growth. But there's so much growth that can happen if you look at your own business holistically, really get an understanding of how things are happening in your business.

[00:29:07] And then that, that can really help you grow because you can learn from your mistakes. Like inevitably, you're gonna make mistakes with investing and if you don't actually take the time to slow down and say, okay, how did that property perform? Was it in line with the budget I put together? Really look at your budget to actuals. I think slowing down and taking that time to understand, it will propel you forward so much more than if you just kept running as fast as you can. So that's where I think there's certainly opportunities.

[00:29:35] Cynthia Meyer: I think that's perfect guidance because your real estate books is your real estate portfolio expressed in numbers? There was just, as you mentioned, there's a story in that, right? Looking at that from a helicopter level view and to see where you have advantages and opportunities and where you need to clean things up is the story of every business owner.

[00:29:56] Kristen Ambrose: Yes, exactly. That's what I learned in accounting. I took accounting in high school for the first time.

[00:30:00] Cynthia Meyer: You took accounting in high school. Really?

[00:30:02] Kristen Ambrose: I took accounting as a freshman in high school.

[00:30:04] Cynthia Meyer: Where did you go to school, Kristen?

[00:30:07] Kristen Ambrose: I grew up in New Jersey. I took accounting as a freshman, just I landed in that, I think unlucky, but it turned out to be lucky. I wasn't happy at the time. I was like, oh, accounting. I wanted take pottery, but I really actually loved accounting, like right away. I was just good at it. And then I ended up taking like a business course every year of high school. They like made a business path in my high school, modeled after what I had done just by choice. So I've loved accounting for a long time.

[00:30:31] Cynthia Meyer: Oh, that's very cool. That's very cool. And we can talk a little bit more after we finish up here.

[00:30:37] Kristen, tell me where can we find you online?

[00:30:40] Kristen Ambrose: Yes. So I we're really big on LinkedIn but also Instagram, I think we're TikTok, YouTube. I just, yeah, I like to engage. Oh, and BiggerPockets, I'm mostly engaging on LinkedIn and BiggerPockets is where I'm talking to the most people. I found a lot of my clients have come from BiggerPockets in LinkedIn and it's just having good conversations with people there, even that necessarily aren't like great fits for clients. It's just a good community. It's great investors.

[00:31:08] Cynthia Meyer: I always say that BiggerPockets is the LinkedIn for real estate investors.

[00:31:11] Kristen Ambrose: Yeah.

[00:31:13] Cynthia Meyer: I was teaching a couple of sessions at a convention of, or a conference of fee-only financial planners at the NAFA conference this past weekend. The end of the workshop, I gave them some action steps and I was like, if you're not in BiggerPockets, join BiggerPockets. Yeah.

[00:31:26] Kristen Ambrose: Yeah. I think they just started their like pro verified professionals. Do they have one for financial planners? Because they have tax CPAs and bookkeepers and I became one.

[00:31:35] Cynthia Meyer: So yeah. You can list yourself as a financial planner on BiggerPockets. I don't know if they verify your credentials or not. Did they verify your credentials?

[00:31:41] Kristen Ambrose: Yeah, they did it. It's a fairly new program.

[00:31:43] Cynthia Meyer: Ah, interesting.

[00:31:44] Kristen Ambrose: And they know they were doing it with realtors for a long time, so now they're trying to do it with like financial professionals, as well.

[00:31:49] Cynthia Meyer: Ah huh. That's interesting, huh? I'll have to look into it.

[00:31:52] So Kristen, it's been amazing to talk to you today. I think you've done wonderful things in your business. You're bookkeeping rockstar for real estate investors and Jersey girl.

[00:32:03] Kristen Ambrose: Yes. Thank you so much.

[00:32:05] Cynthia Meyer: So thanks very much for being on conversation today and we hope to have you back again in the future.

[00:32:11] Kristen Ambrose: Yeah, thanks. Look, looking forward to continue working with you, maybe share some clients.

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