I need to speak with a RE-CPA as well ..

9 Replies

I have reached out to some local people (referrals etc) but I would like to speak with someone who is familiar with building RE portfolios and using BORSA... anyone here feel free to reach out or reply.  Thank you.

There are several CPAs on here (including myself) who work with investors and can surely assist you. Reach out and see who you fit well with.

@Chris M.

Borsa is simply the privately branded name of the ROBS program as offered by a particular vendor.

ROBS stands for Rollover as Business Startup.  Such plans allow you to utilize existing tax-deferred retirement savings to capitalize a business in which you are directly involved.  There are no taxes associated with having the retirement plan become a shareholder of your business, but the business itself will operate in the taxable realm as a sub-chapter C corporation.

This structure has been around since the 1980's and is commonly used in the franchise acquisition realm.  In the real estate space, such a program would work for someone interested in operating a real estate development and construction company, but not for passive investment holding activities.

Very few CPA's will be intimately familiar with this program, though surely some are.  Your real need for a CPA in this space is someone who can assist you in actually running the C-Corporation that will be the plan-funded business.  The intersection between the business and the retirement plan should mostly be handled by a quality ROBS plan provider, and they will generally work with your business CPA.

Originally posted by @Brian Eastman :

@Chris M.

Borsa is simply the privately branded name of the ROBS program as offered by a particular vendor.

ROBS stands for Rollover as Business Startup.  Such plans allow you to utilize existing tax-deferred retirement savings to capitalize a business in which you are directly involved.  There are no taxes associated with having the retirement plan become a shareholder of your business, but the business itself will operate in the taxable realm as a sub-chapter C corporation.

This structure has been around since the 1980's and is commonly used in the franchise acquisition realm.  In the real estate space, such a program would work for someone interested in operating a real estate development and construction company, but not for passive investment holding activities.

Very few CPA's will be intimately familiar with this program, though surely some are.  Your real need for a CPA in this space is someone who can assist you in actually running the C-Corporation that will be the plan-funded business.  The intersection between the business and the retirement plan should mostly be handled by a quality ROBS plan provider, and they will generally work with your business CPA.

Thank you @brianeastman

I am familiar with the BORSA/ROBS/BDSA model (and i have been perplexed how many people are not aware of this tool) thus why I am asking for any and all CPAs on here to join in the discussion or send me a message.  I have been doing my homework on this for a couple months but I want to ensure I am choosing the right tool and i have the right team in place to help me work through the tax side of this 



Originally posted by @Brian Eastman :

@Chris M.

Borsa is simply the privately branded name of the ROBS program as offered by a particular vendor.

ROBS stands for Rollover as Business Startup.  Such plans allow you to utilize existing tax-deferred retirement savings to capitalize a business in which you are directly involved.  There are no taxes associated with having the retirement plan become a shareholder of your business, but the business itself will operate in the taxable realm as a sub-chapter C corporation.

This structure has been around since the 1980's and is commonly used in the franchise acquisition realm.  In the real estate space, such a program would work for someone interested in operating a real estate development and construction company, but not for passive investment holding activities.

Very few CPA's will be intimately familiar with this program, though surely some are.  Your real need for a CPA in this space is someone who can assist you in actually running the C-Corporation that will be the plan-funded business.  The intersection between the business and the retirement plan should mostly be handled by a quality ROBS plan provider, and they will generally work with your business CPA.

Brian have you or any of your clients utilized a BDRA account?  Pros / Cons?

@Brian Eastman

Yes, we have worked with hundreds of clients on the establishment of ROBS plans over the years.  

Like so many things in business and taxes, there are many pros and cons, and they will vary depending on a specific situation.

The requirement to operate as a C Corp and offer retirement plan benefits to all qualifying employees is a big consideration for many small businesses.  Is being self-funded and therefore more cash-secure a better option than debt or bringing in investors?  It can be for many ventures.  Scale is a big factor to consider.  You do not utilize such structures for $50K ventures, for example.  

For your own venture or a closely held family venture, the plan implementation can be pretty streamlined.  We see a lot of scenarios where a handful of partners want to start a business and only one wants to use retirement funds.  The trade offs for those other cash investors can be an issue... or not.  It just all depends on everyone's goals.

Separate from the business plan, you have to look at the highest and best use of those tax-sheltered retirement dollars.  Clearly investing in yourself has benefits, but there is also significant risk in any new business venture.  

In a more classic retirement plan, the focus is on compounding tax-sheltering over time to maximize growth of the retirement savings.  With the ROBS approach, the focus is less on sheltering and more on access to the funds today to capitalize your business.  There is still some sheltering benefit in the form of C Corp dividends to the plan and the potential for new plan contributions, but the actual business will operate in the taxable realm.

No plan provider will also act as your business CPA - and that is probably a good thing.  As I mentioned in a prior post, your CPA will mostly be there to look at your business strategy and operations without having to be intimately familiar with the ROBS concept.  The ESOP that brings retirement money into the business is somewhat standalone, and really just a shareholder to the corporation like any other in most respects.

For tax purposes, here are some items to consider:

1. Are the funds currently in a qualified (tax-deferred) retirement account? If the answer is no, this will not work

2. Is the retirement account you want to roll into the C-Corp with your current employer? Most employers prohibit you from rolling over a retirement account while you still work for them.

3. Have you considered what % of the shares you want to self-fund? I have worked with clients who have used their personal retirement plans to fund 100% of their real estate purchases, and they later regret this.