Choosing the BEST real estate accountant???

Question

I have one property currently, under my husbands work LLC. I am trying to get organized so we are set, off the bat, with a good system for all properties to come.

I use my general accountant currently, but I am looking for an accountant well versed in real estate investing- a tax planning accountant. Note: I am most definitely planning on expanding my property portfolio with more properties over time.

That being said, do I need to have each property in their own LLC?? I understand this can create more protection. Also- I saw someone mention that for even more protection... "add each of those house's LLC's to their own solely by a parent LLC that will act as a holding company." Would most of you say YES to this?

Is there any benefit to the accountant being local versus not? Note: We are currently investing in our area (Sarasota FL) but plan to expand nationwide in the next couple years.

Any insight on this? Thank you so much! Cheers.

Megan Templeton · Answer

@Katelyn Atcavage robideaux

Hi there! I recommend separating out the properties into separate LLCs. This ensures that if one property is litigated against, the other property isn't at risk. It places the properties separate "buckets" per se. You could use a separate LLC for each or you could look into an entity like a series LLC. This would allow you to have one entity that is filed with the Secretary of State but you would be able to create unlimited child series LLCs underneath without the need for additional filings, banking, etc. For state of formation, I would recommend TX for a series LLC. If you go with a hub and spoke model, I would have the hub by a WY LLC. They have the best charging order protections and minimal fees/maintenance. For CPAs, I do recommend a real estate specific CPA - they will have a better understating of deductions available, how to claim real estate professional, etc. I would recommend checking out Royal Legal Solutions. They have attorneys and CPAs and are a one stop shop operating in all 50 states - they can help you build the full team you will need for structuring and guidance as our business scales.

Thanks,

-Megan

Ragan Manning · Answer

You can have multiple properties in one LLC or each property in their own LLC. Obviously people do 1 house per LLC for more protection but I don’t think either way is wrong. You can put 2-3 houses per LLC but I wouldn’t exceed much more than that. I would talk to a tax professional about a holding company and parent account but that to me is the safest route if you’re planning on really growing your portfolio. Having a S Corp could be very beneficial depending on the type of REI you’re doing. I can’t say if local vs virtual is better. All of my clients are 100% virtual and they’re located all around the US. I would just advise you get your COA set up properly because that’s the backbone of your business. I would also definitely recommend QBO plus because it has class tracking

Caroline Gerardo · Answer

Quickbooks used to sell the whole nine yards for one price, now there is an annual fee. I suggest you learn to use it to save on having your accountant root through a box of papers and to better understand where you are financially. Why pay for layered LLC's? Get great insurance, be honest, and don't buy C properties. The cost for filing additional returns, filing annual State fees, and keeping track of the moving parts is not necessary with owning one property.

Tal Shachar · Answer

@Katelyn Atcavage robideaux,

I would definitely look for a CPA who specializes in real-estate investments (hopefully one who invest themselves). About LLC per property - it depends on your equity in the property, how cash-flow it brings every year, etc. (basically, don't put all your eggs in one basket).

I prefer having a holding company LLC, typically member-managed or manager-managed, and the property's LLCs to be under it (SMLLC). It is pretty simple structure, and if you don't open an LLC per property, it is not too expensive (if you seek anonymity, establish the holding company in NV or WY)

Good luck with expanding your portfolio!

Basit Siddiqi · Answer

The fact that you live in a state without a state income tax opens your options of an accountant to work with.No need to find an accountant that is a specialist of familiar with your state tax laws since there is no state income tax in Florida.

Choosing the BEST real estate accountant???

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