What to do with personal investment transactions that I don’t want to transfer to Brokerage account?

hbwilliams22
hbwilliams22 Member ✭✭
I make various personal investments in real estate throughout the year. These investments come from a ‘Detailed View’ Brokerage account so I am able to catalog the transactions as needed. I find the current requirement of transferring these investment transactions to a custom Brokerage account and then 'buying' shares unnecessarily complex and frustrating.

If I don’t want to create a custom Brokerage account to transfer these investment transactions to and then buy shares, is marking the Brokerage investment transaction as simply a “Transfer” the best option? I don’t want the transaction to show up as an expense either.
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Answers

  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    Could you provide more detail here about how you're currently recording transactions, maybe with an example or two, and why you must then transfer the transactions to a Brokerage Account?
    A Quicken Investment Account carries within it cash and "securities."  It's been suggested, for people that want their real estate in the Investment section of Quicken, to create a pseudo security for each property, buying X number of shares at some set amount, like a $1.  I assume these transactions you're seeing in the "Detailed View" (what is that?) brokerage account are denominated in dollars, so why are those being recorded in a different Account?
    I, for one, need a better understanding of what's happening here in the real world because your accounting, by a large, needs to mimic that.
  • jacobs
    jacobs SuperUser, Mac Beta Beta
    If I don’t want to create a custom Brokerage account to transfer these investment transactions to and then buy shares, is marking the Brokerage investment transaction as simply a “Transfer” the best option? I don’t want the transaction to show up as an expense either.
    So are you saying that you want to show the total value invested in real estate, without tracking it as an investment? You could enter a transaction of a Transfer in the account money is being sent from in two ways. 

    You could create an asset account for Real Estate Investments, and make the purchase transactions as a Transfer from your Brokerage account to this asset account; the asset account would this reflect the amount you've invested, without the need to enter any BUY transactions. Or if you don't wasn't to track this investment at all, you can do a transaction in your source funding account using the category "Transfer". When a generic Transfer (not to any account) is entered, it tells Quicken to reduce the cash balance because the money went somewhere outside of Quicken. 
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  • hbwilliams22
    hbwilliams22 Member ✭✭
    edited December 2022
    @jacobs @Tom Young I put money into a real estate investment deals as a passive investor. There are various capital calls and distributions throughout the lifetime of the investment. All transactions (investment outflows and distribution inflows) are done from a linked checking account.

    Investment #1: -$10,000
    Investment #2: -$10,000
    Investment #3: -$10,000
    Distribution #1: 20,0000
    Distribution #2: $20,000
    Distribution #3: $20,000

    Again, all of these transactions are happening in a checking account.

    What I have been toying around with is creating a "LLC Investment" Brokerage account. When I wire a $10,000 investment from my checking to the real estate firm and it shows as -$10,000 in my Checking account, I transfer the transaction from Checking to "LLC Investment" Brokerage account. This shows as +$10,000 in that account. I then "Buy" 10,000 shares at $1.00/share which zeroes out the investment account. I don't know what to do with the $20,000 distribution transactions to my Checking account though. If I transfer this to the "LLC Investment" Brokerage account, it shows as -$20,000.

    Preferably, I would not have to deal with the "Buying" or "Selling" of shares as this is simply a real estate investment and not a stock investment.
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  • hbwilliams22
    hbwilliams22 Member ✭✭
    @jacobs @Tom Young I make real estate investments as a passive limited partner through a real estate investment firm. There are multiple investment and distribution transactions throughout the lifetime of the investment. All transactions both outflows and inflows happen from a linked checking account. For example:

    Investment #1: -$10,000
    Investment #2: -$10,000
    Investment #3: -$10,000
    Distribution #1: $20,000
    Distribution #2: $20,000
    Distribution #3: $20,000

    What I am toying around with is creating a custom "LLC - Investments" Brokerage account and transferring the checking account outflows and inflows to this account when they happen.

    For example, when I wire the first investment of $10,000 to the investment firm and it shows as -$10,000 in my checking account, I transfer this transaction to the "LLC - Investments" Brokerage account which puts a $10,000 balance. I then "Buy" 10,000 shares at $1.00/share which zeroes out the account. I will do this for each investment transaction that hits my checking account.

    For distribution transactions, I am not quite sure what to do. For example, when the first $20,000 deposit is made to my checking, if I transfer this to the "LLC - Investments" Brokerage account, it shows as -$20,000.

    Instead of transferring transactions back and forth, is there a better way? Ideally, I would not have to bother with buying and selling shares as these are simply real estate investment transactions and not the buying and selling of stocks.
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  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    edited December 2022
    "I make real estate investments as a passive limited partner through a real estate investment firm. "
    This is some sort of Account in your Quicken file, presumably an Investment Account?
    "All transactions both outflows and inflows happen from a linked checking account. "
    Why a "linked" checking Account?  Is this a real-world account?  Typically I'd expect the cash you invest and the distributions (income, proceeds from sales?) could settle into the Quicken Investment Account.
    "What I am toying around with is creating a custom "LLC - Investments" Brokerage account and transferring the checking account outflows and inflows to this account when they happen. "
    Than makes sense to me.
    "For distribution transactions, I am not quite sure what to do. For example, when the first $20,000 deposit is made to my checking, if I transfer this to the "LLC - Investments" Brokerage account, it shows as -$20,000."
    If it's settling directly into your checking Account, that's the place, normally, where you'd do your accounting.  If you somehow want to have it flow through your LLC - Investments Brokerage Account, then create a dummy $20,000 in the Investment Account, do your accounting for that $20,000 in there, then "transfer" the $20,000 from that Account.  That creates the "-$20,000" you're referring to, offset by the dummy deposit of $20,000, leaving the cash unchanged.
    "Instead of transferring transactions back and forth, is there a better way? Ideally, I would not have to bother with buying and selling shares as these are simply real estate investment transactions and not the buying and selling of stocks. "
    You certainly could do this by simple "Asset" Accounts instead of "Investment" Accounts.  The accounting would be exactly the same either way, except for the Buy and Sell aspect, and the Accounts would simply show up on a different place in your Balance Sheet.  
    If the firm you're dealing with provides periodic estimates of the value of your various (I assume) real estate holdings, then using an Investment Account pseudo security makes a certain amount of sense as you can update the "securities'" quote, see how your various properties are doing and have a closer accounting of your net worth.  Too, you don't absolutely have to have securities in an Investment Account.  If you want the real estate investments to be shown on your balance sheet as investments but don't want to see the investments' values, simply run the cash back and forth in those Investment Accounts, with no securities involved.

  • hbwilliams22
    hbwilliams22 Member ✭✭
    "I make real estate investments as a passive limited partner through a real estate investment firm. "

    It comes from cash within an Detailed Quicken Brokerage account, yes.
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