How to Report Commercial Real Estate on a Personal Financial Statement

As a commercial real estate owner, you are likely familiar with the process of filling out a personal financial statement (PFS).

You undertake this activity when you are trying to obtain a business loan or another type of outside financing. A personal financial statement (PFS) is a comprehensive look at all of your assets, income, liabilities, and expenditures. 

When you look at all the information you have to fill out on a PFS, it can feel pretty intimidating. This is especially true if you own a lot of real estate. However, it’s not that difficult! Here’s what you need to know about including your real estate on your PFS.

How to Fill Out the Real Estate Portion of Your PFS

Step 1: Add Your Primary Residence

Begin with the property that is your primary residence. In this section, you should include:

• The property type
• Address
• Date purchased
• Purchase price
• Current fair market value
• Mortgage holder’s name
• Mortgage holder’s address
• Amount paid to your mortgage
• Mortgage account number
• Mortgage balance
• Any second mortgages you’ve taken out

Keep in mind, one of the biggest mistakes you can make when filling out a PFS is overstating the value of an asset. Make sure you’re being realistic and not overstating the value of your primary residence or other real estate assets. 

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Step 2: Add Your Commercial Real Estate and Other Rental Properties  

Next, continue to add the same information as above for all other properties you own, including commercial real estate and any rental properties. 

Every property should be listed separately, and all the figures should be accurate. If you need to double-check any of the information, make sure you do so for accuracy. Make sure to mark each property as residential or commercial.

If your real estate is a source of income, you’ll need to include this information as well. This might include rental income or any profit you made when selling real estate. 

Lastly, your PFS must contain any financial liabilities. This means any loan or line of credit you’ve taken out, including for real estate purposes. 

Who Signs the PFS?

Usually, the PFS should be signed by all the owners of the property. However, if someone owns less than 10% of an asset, there’s no need for them to sign. If another owner is your spouse, you can create a joint PFS. But if there are other owners who are not your spouse, they will need to fill out a separate PFS.

Manage Your Assets with Ease with STRATAFOLIO

In most cases, the most difficult part of creating a personal financial statement is gathering all the necessary information. If you own a lot of real estate, this is a much more time-consuming process to update. Unless, of course, if you have STRATAFOLIO. STRATAFOLIO connects directly with your QuickBooks accounting system. With this connection, we are able to share your current outstanding debt across your entire portfolio. 

STRATAFOLIO gives you quick access to each property in your portfolio:

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• Current assets
• Purchase price
• Date of purchase
• Existing debt on each property
• Lender by property
• Current asset value
• Equity
• Plus so much more!

All of this information can be exported for quick sharing with your lender – giving you property by property analysis or a global picture. Once you have all the required information, it’s easy to fill out the PFS forms and move on with your day. 

If you own multiple properties, filling out your personal financial statement is time-consuming. It doesn’t have to be. From cash flow management to debt management and more, STRATAFOLIO online software solution simplifies it all! You can request your free demo today.

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