Automation – Stessa Rental Property Accounting

Today I am going to do a review of Stessa, an online rental property accounting platform.

But first, a disclaimer:

***This review may contain affiliate links that compensate me for user registrations of this product.***

As I have detailed in a previous article, I started using Stessa last year to track accounting for our rental portfolio. Previously, we used Google Sheets, tracking rental income and expenses for each property on different tabs. This would involve me going in to the first property’s income tab, entering the collected rent, then checking all of my receipts and accounts to verify I hadn’t missed any expenses and adding them to the expense tab for that property. I set up expense categories and put in a section to summarize the expenses by category and by month. While not ideal, it insured that someone at my CPA’s office was not classifying an expense in the wrong category or for the wrong property. It was not hard to do, just more a matter of remembering to do it.

Around the middle of 2018, I started seeing advertisements for a product called Stessa on Facebook. As per my SOP, I ignored them, other than taking note of the name. A few weeks after first seeing the ads, I heard an advertisement for it on The Bigger Pockets Podcast. This was more effective, as they pointed out how it was free for rental property owners and individual investors and involved some automation to keep track of your accounting. They also pointed out how the product was developed by real estate investors for real estate investors and the name was “assets” spelled backwards.

I went to the web site and registered for it. I was able to set up our properties and import bank & credit card histories to the transactions section, allowing me to categorize each expenditure. It took maybe 10 minutes to set up two properties. And, once numbers had been entered, the dashboard populated with portfolio metrics. Way nicer than my spreadsheets!

Features

Individual tracking for each property:

Property Profile Header – Address, Acquisition Date, and Cost.

Property Details – (Year built, neighborhood, parish [county, for those of you outside Louisiana], number of units, bedrooms, bathrooms, square footage, and lot size, all pulled from Zillow, based on the address.)

Valuation – Provides for multiple options: Custom Valuation, Zillow Zestimate (automatically polled, user choice to update property valuation), Gross Rent Multiplier, or Capitalization Rate.

Rent Roll – Allows entry of Bed/Baths, Square Feet, Tenant names, Rent, Market Rent, Deposit, Move-in Date, Lease Expiration Date, and notes.

Property Notes section – Freeform note space for property.

Monthly Expenses – Allows for Pro-Forma expense entry and pulls in categorized expenses from the Transactions section to show actuals compared to Pro-Forma.

Neighborhood – Shows location on a Google map, with a Walk Score and a Bike Score for the property.

Assessments – Pulls in assessed value and property tax amount (I’m assuming from Zillow), and allows you to add missing assessment/tax details.

Capital Expenses – Allows for entry of Date, Description, & Amount of Capital Expenditure.

Loan-to-Value – Shows a chart with LTV percent, Property Value, Debt (principal balance), and number of loans.

Mortgage – Details the Lender, Principal Balance, Payment Amount, and Interest Rate.

Insurance – Displays the Carrier, Premium, Policy Number, and Renewal Date.

Transactions:

As I mentioned above, Stessa allows you to link bank accounts and credit cards to the Transactions ledger. It lets you initially import all transactions and gives you the option to review them to either categorize each one correctly or, in my case, the credit card I use also has personal charges, so it it allows me to delete those transactions.

Stessa does not store your credentials on their servers and use bank-level encryption to secure the transfer of information. It also does not allow changes to your bank or credit card accounts. It only pulls a copy of your transaction information.

The Transaction Ledger Menu allows you to review new transactions, view ALL PROPERTIES transactions, view individual property transactions, or add a new property.

The main Transaction Ledger display shows all transactions, filtered, based on the menu selection. It additionally allows you to search by keyword and/or filter by Date, Category, Amount, or Account.

There is also an export function, allowing you to export filtered transactions to a *.csv file.

You can manually import *csv and *.qif files from accounting software, in addition to adding individual transactions by hand, such as mileage.

Reporting – Reporting is one of the reasons I was interested in trying out Stessa in the first place. It provides you with standard reports such as Income Statements, Cash Flow, and Capital Expenditures, with options to select a date range, property/portfolio, monthly breakout, and whether or not to show Category Details. The report is downloaded as an Excel file, allowing you to customize the report title and report formatting, if needed.

The other reporting option I have mentioned before is the Tax Package. This contains everything needed to hand off to your CPA at tax time. And it sure makes it easier on me!

Click on this link to get your own free copy of the Rental Property Tax Guide by Stessa.

Dashboard

The dashboard is the main page you see when logging in on a computer. It allows you to show the total portfolio or to select individual properties.

It contains the following sections:

Portfolio Value – Options to see Market or Purchase Value.

Asset Return – Either Appreciation or Levered returns.

Occupancy – Detailed in percent.

Income

Cash Flow

Unit Count

Property Count

Debt – Total

Net Cash Flow – A chart detailed by month & Category

Location – Google map showing all properties in Portfolio View or a single property in Property View

Compare Properties – Rental Income, Market Value, and Square Feet. Available in Portfolio View only

Property Highlights – Property picture from Google Street View, Income, Expenses, LTV, and Occupancy. Available in Property View Only

Summary

I think that Stessa is a great automation tool for rental property accounting. It’s free, cuts down on time spent doing bookkeeping, and makes tax time easier. On top of that, their user support is outstanding! Early on, I identified a couple of bugs and they were fixed within a couple of days. Amazing!

If you are interested in trying out Stessa for your rental properties, please click on the link below:

Stessa Rental Property Accounting

And, as always, let me know what you think in the comments. Ask questions, tell your story.

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Automation – Data Frequency: How “Real Time” Is Real Time?

Happy Finter from South Louisiana! Fall started to show up, but winter was riding shotgun! We went from highs of 81 degrees F / 27.22 degrees C to 45 degrees F / 7.22 degrees C AND clouds and rain. Christmas light show can wait a few more days to get set up.

Today we are going to go over Data Frequency and how it relates to aspects of drilling automation. How often we receive a data point for a given channel or curve.

 

Variations on Real Time

 

Ask someone what their definition of real time is and depending on their particular needs, you will get different answers. Some people feel that getting mud report data as checks are made is real time enough to keep them informed.

Others feel that getting a WITSML 1.3.x, (Wellsite Information Transfer Standard Markup Language), data feed that updates every ten to thirty seconds will be just fine.

Then there are others who are used to seeing the rig default of data coming in every 5 seconds and that is great!

Finally, there are those who opine for sub-second data frequencies to ensure valid tracking of rig component movement and calculations.

Depending on your particular needs, any of these might be valid. For a comprehensive approach, the platform should take into account the needs and requirements for the types of data being captured. It should be able to accommodate sensors or inputs that generate anything from one data point per day down to many data points per second.

 

(Just as an aside, I really like the way WITSML 2.x and ETP are shaping up for real time data)

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Data Frequency

The type of data should drive the frequency of data capture, in addition to what the usage of the data will be.

Some data doesn’t change very fast, so it does not need to be updated very frequently.

Things like wellbore and drill string geometry, fluid properties, and positioning data do not need to be updated every second or few seconds. In the case of drilling fluids, Density updates every one to two minutes is a decent frequency, whereas the oil/water ratio does not need to be updated as frequently.

Other data is constantly changing and depending the particular sensor, could indeed warrant the need for sub-second frequency data.

 

A good example for that need would be block position, which is used to calculate running speed or pipe acceleration. This is, in turn, utilized to calculate tripping hydraulics in real time.

The benefit of having the ability to do this based on sub-second data allows for simulating the micro-movement of pipe in tight window scenarios…too much down hole pressure, the formation breaks down, causing fluid losses and too little down hole pressure, the formation fluids/gases come into the wellbore, thus inducing a kick.

 

Logical Assumptions & Why It Matters

 

Not all data needs to be updated at a high frequency. As indicated in the above section, data frequency depends on how often the data changes. The higher the change rate, the higher the data frequency needs to be.

The main reasoning behind this idea is that you may miss significant changes in the data if your sampling frequency is too slow.

Below is an exaggerated example of missing changes to pipe acceleration (or Running Speed) due to sampling frequency. The data is fabricated, for illustrative purposes.

 

 

In the image above, the running speed is a straight thirty feet per minute, with a data frequency of one data point per second. Everything appears smooth, with no issues.

 

 

In this image, I’ve added sub-second data to show that the smooth, steady running speed was actually not very smooth, it just appears that way due to when the data points were captured.

 

Because this data is not captured, it is not thought to have occurred. But if you don’t have visibility of it, you can’t know it is there.

 

The examples above are made up & exaggerated to prove the point. I have seen this play out over different data points in the drilling arena.

When we were first attempting to develop the Applied Fluids Optimization service, our original software would calculate tripping hydraulics at a one second frequency, but would only capture the data at a thirty second frequency. Running speed spikes would lead the software to calculate and display large pressure variations. When we would try to show these excursions after the fact, we could not because the thirty second frequency did not coincide with the actual deviations.

One more fluids-related example: Fluid density on a land rig. Land rigs are an exercise in economy, from an offshore drilling perspective. The rig crews are smaller, so there are less people to do a set number of jobs. The mud pits are smaller, contributing to the total circulating system being smaller. Because of this, it allows for less significant events to impact the fluid properties. The derrick hand is busy? He can’t dust up the density. The shaker hand is up on the floor making a connection? He didn’t adjust the flow on the shakers. Small system, less attention, more chance for changes.

The mud engineer, (person responsible for keeping the drilling fluid running within specifications), should be running four mud checks a day. So, we should see, at minimum, four density measurements…one every six hours. When we were conducting field testing on the DRU, we noticed that we had lots of variation and excursions in the density reading from the DRU where the mud engineer’s data showed fairly smooth trends. When we overlaid the two data sets, the mud engineer’s data matched almost exactly with the DRU readings, just that it missed the excursions.

 

Takeaways

• More frequent data helps you to better understand what is going on
• Depending on the environment, a data curve may need a higher frequency
• Some data does not need to be high frequency
• Choose your data focus wisely

 

And, as always, let me know what you think in the comments. Ask questions, tell your story.

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Automation: Good Signs Ahead for Automation in the Oil & Gas Industry?

 

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Hydraulics-Focused Drilling Data

 

This week is a quick post about what may be an interesting trend in the US Land Oil & Gas Sector…Interest in Automation and Optimization technologies to increase efficiencies. I have a theory on why. AND, #Disclaimer, I mention the service offering I work with.

 

Historic Interest in Automation

 

Historically, there are always early adopters for technology, and the oilfield is no different. You have a few entities that want to be on the cutting edge of everything, a few tire kickers, and the majority don’t want to spend any money until something is proven to them. Such is the case with automation and optimization, from the perspective of the offering we have (BaraLogix Equipment & Services).

 

Offshore

 

We initially provided the optimization and event detection service offshore. This was before the equipment was ready to ready to be deployed commercially. Actually, it was still in development. We had a few jobs here and there, but not a lot of buy-in. Even with customers that benefitted from significant value from it, it seemed the response was always something similar to “Maybe you actually did help us achieve our goals, but maybe it was something else…” or “We don’t have the authority to sign off on this case history saying that you brought us value.”

So we did jobs here and there, but  there was never a consistency to the work.

 

Land

 

As far as land work was concerned, due to different economics, the service was always outside the client’s budget. In fact, the only time we did provide the service on land, at least in the US, was when conducting trials of the equipment.

 

Fast-forward to today…

 

We now have customers in the US Land area that are interested in what the service and equipment can provide them. There are three jobs starting up in the next three weeks or so that are a mix of the combined equipment & services or just the standalone service.

 

My thoughts jump to “Why now?”

 

What I suspect is that over the last 3-plus years, operators have been increasing their efficiencies to stay relevant at lower oil prices. And possibly they have plateaued. Now, they want to take that next step and increase efficiencies even more. I think that may play a big part in the sudden interest in our equipment and services.

 

What do YOU think could be driving this?

 

And, as always, let me know what you think in the comments. Ask questions, tell your story.

 

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Personal Improvement – Books That Have Influenced Me Recently

Books That Influenced Me

 

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Welcome back to another installment of Things I Think About! This week I am going to go over a few books that I have read recently that have had an impact. While some of them cover a mix of topics, to me, they mostly fall into one topic. Because of this, I will break them out by topic and detail the crossover topics, and why I feel that way, for each book I also have them listed separately on my Recommended Books page, HERE.

 

Business

The E Myth Revisited by Michael Gerber

This book speaks to my soul! I “read” the Audible version, (as I do most books due to my 3-hour plus daily commute), recorded by Michael Gerber himself. This book details why a lot of “Entrepreneurs” find themselves overworked, underpaid, and without the ability to grow. It is an interleaved mix of example stories with lessons explaining about each story. The main focus of the book is to explain why developing processes and systems for operating your business will allow you to employ other people to work IN the business so you can work ON the business.

 

The 4-Hour Workweek by Tim Ferriss

A young Tim Ferriss relates how he figured out how to not be locked into common misconception of the American Dream…go to school, get a good job, work like a slave for 20-30-40 years, then retire at an age where there is a good chance that you will have trouble enjoying life. In the 4-Hour Workweek, he details the concepts of mini-retirements, becoming effective and efficient in whatever you do for work, and ideas for small businesses that require little to no maintenance to support you on an ongoing basis.

Granted, as even pointed out in the book, the goal is not to be able to lay on the beach drinking mai tais, it is to free you up to do the things you want to do, including world travel, learning languages, and/or working with non-profit organizations.

This book also qualifies as a personal Improvement book, because a lot of the recommendations for efficiency and effectiveness while working have helped me to reduce a lot of stress at my main job.

 

Rich Dad’s Cash Flow Quadrant by Robert Kyosaki

This book breaks out the different classifications of people earning money. ESBI stands for Employees, someone who works for someone else to make money, Self-Employed, a person working for themselves to make money, Business Owners, owning a business & employing other people, and Investors, those who employ their capital to buy assets. It promotes the idea to be either a business owner or, ultimately, an investor, as this usually provides the best returns on time & money.

 

Personal Improvement

The Obstacle is the Way by Ryan Holiday

Ryan Holiday is a devoted Stoic. He has multiple books and a website dedicated to Stoicism. This book is kind of a manual for achievement. I really enjoy it because it basically lays out my philosophy on life. The short version is “Do what you can to change the things you don’t like in your life…Ignore the things you can’t change.” The Obstacle is the Way takes it a step further in that it guides you to figure out how to change either the situation or your thinking about the “things you can’t change”.

 

Rich Dad, Poor Dad by Robert Kyosaki

Robert Kyosaki tells the story of how he grew up a poor kid, but due to the tutelage of a friend’s father, learned to become a businessman. The book is a simple read but puts forth important concepts…assets are only assets if they will make you money, don’t spend foolishly, and educate yourself to grow. There is also a good bit of advice on real estate investment as a vehicle to become wealthy.

 

Principles by Ray Dalio

Ray Dalio is one of the richest men in the world and got that way by building one of the top hedge fund management companies, Bridgewater Associates. In Principles, he relates his lis life and how he got to where he is, developing his principles for business and personal life as an operating system along the way. This is another Audible entry where the author reads the book to you. It works.

 

Real Estate Investing

Long Distance Real Estate Investing by David Greene

While I don’t invest in real estate outside of my back yard, (for now), this book is incredibly useful as a guide of how to do things. The methodologies and techniques laid out here will work even in a local market. It’s a mix of strategies, tools, and tips to be successful.

 

The Book on Rental Property Investing by Brandon Turner

This book is a thorough primer for anyone wanting to get into rental properties as an investment. It covers everything from finding properties to rehab tips and beyond.

 

The Book on Managing Rental Properties by Brandon Turner and Heather Turner

Hmmm…the title sounds a bit familiar…YES! This is the follow-up book to The Book on Rental Property Investing. It picks up where the previous book left off and takes a deeper dive into what you need to do to manage properties successfully.

 

Loopholes of Real Estate Investing by Garrett Sutton, Rich Dad Advisor

Another Audible author read, Loopholes covers the benefits of and hazards to watch out for when investing in real estate. I have probably listened to this book at least 6 times…right up there with the 4-Hour Workweek and The E Myth revisited. Lots of great advice.

 

And, as always, let me know what you think in the comments. Ask questions, tell your story.

 

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Holiday Lighting – The Automation Technology Used to Run a Show

RGB and AC Controller Boards

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Today, I am going to discuss the automation technology that I use to run our holiday light shows. I am using this as motivation to get moving on building additional props for my Halloween show because I have to get it built, then add sequencing to cover the new element in addition to trying to add a new song or two.

Sequencing View

There are quite a few options for making lights go “blinky-blinky”, but the one I have settled on to start out with is manufactured by a company called Light-O-Rama.  They have lots of options to choose from, so no matter if you are a beginner or an experienced enthusiast, they have products to get you going.

16 ch. AC Controller

Controllers

There are various things you can do to make your holiday light decorations blink. The first thing I experienced was the “blinker bulb”. It was a special bulb that, when inserted into a string of Christmas lights, made them blink.

The next option that came along was lights with a special controller built into the string that gave you options blinking and shimmering. Other products were a box pre-programmed with songs and they blinked the lights in time with the music but was in no way synchronized with the music as a show. There are also LED bulb strings that change from white to multicolor to blinking multi-color depending on the number of times you press the button on the wireless remote control.

These are all options we have incorporated into our holiday lighting display along the years, with the exception of the preprogrammed music box prior to getting started with the animated light show synchronized to music.

Our first controller was a sixteen channel AC controller. This allowed us to have 16 different light show elements or sets of elements turning on and off, synchronized with music. It is able to handle incandescent and/or LED light strings.

We next added a second AC controller and a twenty-four channel RGB controller. RGB stands for Red, Green, Blue, the three primary color components of a RGB light. By varying the intensity of each component, it changes the color that the RGB element puts out. This is also known as a “Dumb RGB” controller. Since each channel controls a single color in an RGB element, twenty-four channels can control eight RGB elements.

We then added a third sixteen channel AC controller to our setup, giving us a total of forty-eight AC channels and a grand total of seventy-two channels with the RGB controller.

This year, in the off season, we added a second twenty-four channel RGB controller. The plan is to use it to control a  dancing skeleton, my above-mentioned prop I need to build.

Lights

We use a mix of incandescent, LED, and RGB lights (flood lights and RGB strips) in our show. LEDs work out great due to the low power consumption.

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We go shopping on the day after Christmas each year to pick up new and backup lights for the show at a 70%-90% discount off of retail pricing. It helps to keep the cost of putting on the show down.

Cables

We initially used extension cords to hook everything up, but it started getting expensive as we added more channels, not to mention that they are bulky and heavy.

We now mainly use SPT-1 wire (16-gauge speaker wire) along with vampire plugs to run power to each string of lights.

Automating the Show

Our goal, once we started using the light controllers, was that the show would be totally automated…meaning we would not need to turn it on and off every day. We also wanted to be able to have visitors be able to hear the music, but not have the music bother my neighbors.

So we added a standalone “miniDirector” to run the show and a FM transmitter.

The miniDirector has the sequences and songs saved on a SD card. When the power is turned on by the timer, the miniDirector starts running the show in a loop. It outputs the audio to the FM transmitter so viewers can hear the music right in their cars and it outputs the sequencing signals to the controller via serial connection using cat-5 cable. All the controllers are linked together in this way.

Now the show runs at the programmed time with no need to keep a separate computer running to drive it.

Well that about wraps it up for what we use to automate our holiday light show. Below are videos of some of the sequences:

Videos

This is Halloween – Full

Carol of the Bells – Full

Dragula – Full

This is Halloween – Clip

And, as always, let me know what you think in the comments. Ask questions, tell your story.

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