looking for CPA, tax & real estate lawyer,

11 Replies

I'm just beginning to start investing in my very first rental property & thought I'd ask many of you seasoned investors in the San Diego CA area for any recommendations for a good CPA, tax lawyer, & real estate lawyer. I have met with a CPA that I found on yelp, but she didn't seem like a good fit to work with I'd greatly appreciate any recommendations you have! thank you in advance for your guidance!

@Katrina Diwa Welcome. It's unlikely that you need any of the professionals you listed if you're buying your first rental property and it's a typical single family or small multi.

There's scenarios where you may need one, two, or all three of them, but buying a single (or handful) of rentals (especially if bought locally) generally won't require a tax lawyer or real estate lawyer ... and any CPA worth their salt understands how a Schedule E works.

Is there a particular reason you know that you need specialists in these areas at this point?

Just trying to be helpful so you spend your time on the most important things.  The first time I needed a real estate lawyer was 10 years after my first rental and only because I needed to draw up documents related to a subdivision I was developing.

@Justin r. Ty for your reply. I probably won't need a lawyer anytime soon,  but I will be purchasing more than 1 property in the near future. I would like to have good CPA, I am purchasing in San Diego first & will move on to Vegas next for purchases. 

I also opened a self directed IRA and would want a lawyer to help with purchasing a home with this account. I guess I am looking to meet with these specialists so I can have my own network of people that I am comfortable with enough to work with.

But as of this moment, I know I don't need their expertise just yet, but I just know, I will in the near future.

@Katrina Diwa  

Chances are that you will have an easier time finding a cash-flowing property in Las Vegas than San Diego. 

There are several reasons that you may want to hire a CPA
  1. The CPA can offer you tax advice and strategies for you to minimize your tax liability.
  2. The CPA can save you time from researching tax laws, form updates and actually completing the form.
  3. The CPA can offer you confidence that the return is completed accurately.

As a California resident - you will be reporting your worldwide income on your california state tax return. This California state tax return will include the rental income from your property in Las Vegas(when you acquire it). 
Since Nevada does not have a state income tax return - you will not be paying any state taxes to Nevada.

California is a very tricky state. It is a large state that often goes over their budget. For this reason - they are aggressive in regards to getting as many people to be under their jurisdiction for tax compliance.
California is one of the few states that says if you operate a rental outside of the state but you make the decisions of what to do with the rental property within the state of California - you are considered to be doing business within California. This is important if you ever decide to create and LLC outside of California.

@Katrina Diwa

There are plenty of things you may want to consider ahead of purchase with both a CPA and attorney depending on your circumstances. I work with one of the foremost experts on IRAs and tax law in San Diego if you want his information and really are considering purchasing real estate in the name of your IRA. He's an attorney downtown and also may have some suggestions for trusts. Super nice guy too. You will likely also want to have an estate plan in place if you do not already. It is important also to consider other tax consequences at the outset or at least have an understanding of their treatment before purchase. For instance, you probably will want to know which costs associated with your purchase can be expensed, which are capitalized, and which are neither (usually costs associated with receiving a loan which may factor into your financing decisions).

My original reply implies a CPA isn't valuable. My bad. That's not what I meant - a CPA who can guide you through the details would be very helpful.

Point is only that people often assume buying a rental down the street (or across the country) is complicated and requires professional input - it doesn't unless you're working with high dollar amounts. There's a place for making things complex (with LLCs, trusts, advanced SDIRAs, issuing notes, purchase options, etc), but in the real world they all add time and cost and risk and inflexibility that won't benefit the typical beginner.

The most important thing is finding the deal, and 95% of the time and energy needs to go there.

All the best @Katrina Diwa - make it happen!

Katina, you really do need a CPA with real estate experience and familiarity with self-directed IRAs. While you can invest via an IRA, there are downsides and very strict rules particularly regarding any debt financing connected to the property in your IRA. Also, if you are investing for appreciation, a self-directed IRA is not ideal because you will pay ordinary income tax rates on the appreciation instead of lower capital gains rates. Tread carefully.


you are correct that it is very important to understand the rules when investing using self-directed IRA. Also regarding financing, you can only use non-recourse loan. Conventional financing is not allowed because as disqualified person account holder is not allowed to provide personal guarantee.

However, your comment about investing in real estate for appreciation is non-relevant. It doesn't matter what you invest in with your IRA, when you take a distribution from your retirement account that amount would be considered ordinary income regardless. So your goal should be to maximize the returns and grow your IRA as much as possible. And if you can accomplish that with real estate - you are ahead of the game. Consider two options when you have $100K in your IRA:

1. Invest your IRA in stocks, get an average return of 8% over the next decade, you will end up with approximately $215K

2. Or use a self-directed IRA to invest the same amount of money in real estate. Between cash flow and appreciation you average 18% return and at the end of the same 10 year period you will end up with $423K.

Now that you are retired and can start taking distributions it will be taxable income to you, but which option would you rather pick, 1 or 2? 

Trying to compare investing in real estate in your IRA with investing using your personal savings is like comparing apples and oranges.

I've been using Mark Kohler for years. He is a tax lawyer, CPA, & real estate investor, with a law firm & a CPA firm, offices in SoCal, Arizona, & Utah. His firms cater to entrepreneurs, & he's very pro RE investment: