FUNDAMENTALS
SUCCESS FORMULAS
Profit First for Property Managers
THE BEST FORMULAS FOR SUCCESS CAN BE SURPRISING
by Derek Seal, RMP®
not be around forever. I was so busy that when April came around each year, my accountants would tell me that I had such a great year that I would owe thousands of dollars of taxes. No matter what I had saved, it was never enough. I often felt puz - zled, wondering where all the money had gone. Over the years I had come to know the Generally Accepted Account -
or many years, in various aspects of the real estate business, I would work really hard to bring in money and pay the bills. During the housing crisis, I sold a lot of real estate for banks and REO departments and brought in more money than I had ever imagined. A few years later I started my property management business as I realized that the foreclosure market would F
ing Principle (“GAAP”) of SALES – EXPENSES = PROFIT. To me, that meant sell the most you can, deduct expenses relating to those sales and whatever is left over is your profit; although, there was little left over. How was this possible since I was bringing in hundreds of thousands of dollars in revenue each year? During a typical week, I would use the Bank Balance Accounting meth -
32 | think realty magazine :: january 2021
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