Finding the right CPA

6 Replies

Hello,

I am relatively new to bigger pockets and real estate investing. Some background, I'm active duty military and recently purchased my first rental property. This property is currently rented, with the start date of June 2019. My family and I used a house hacking strategy and plan on continuing this strategy moving forward. This is the first year my wife and I contemplated using a CPA Vs. H&R Block, which is our usual method. Also, we have not formed an LLC but plan to within the next two years.

Question:

1. How should I search for a CPA with a focus on real estate and military?

2. What are the risks of not having a local CPA?

- we move every two or three years.

3. Is it worth hiring a CPA with only one rental property?

4. How much does normal CPA services run and is it a upfront amount Vs. monthly?

5. Curious: when should I form an LLC?

6. What states are the best to form them?

Thank you ALL in advance!

Sincerely Josh

Hi Josh, welcome to BP & congrats on wading into the REI world.

Also - it goes w/out saying but thank you for your service.

Question:

1. How should I search for a CPA with a focus on real estate and military?   I would exhaust and get very familiar w/your military benefits.  Here is a GREAT article that just came out (my BF is ex military & I've been helping him get hooked up w/an SBA loan & he's said "They need to teach a class on this - I had no idea this stuff was out here for us.)   Here is the article:  https://www.forbes.com/sites/allbusiness/2019/11/09/veterans-entrepreneurs-small-business-support-programs/#67ae7aef33a3

I can vouch that Boots to Business has a ton of resources they can direct you too.  We were given a list, met with a guy two towns over & he gave him so much great advice on a business plan, options, including veteran-rates that are awesome.  SBAvets.force.com

2. What are the risks of not having a local CPA?

- we move every two or three years.

None.  My specialty that led me to where I am now was hiring & growing companies.  In my opinion, you can get more skilled, better communication with remote professionals than walking into an office.  But this is just in my experience AND if you are a good interviewer. (I'm happy to help give you tips in DM if you need interview or screening tips) 

3. Is it worth hiring a CPA with only one rental property?  Yes, absolutely.  They can help you think of things you hadn't thought of before - especially if you get a for-hire CFO type of service where they can make sure your accounts are set up, you're capturing tax & assets correctly & making the most out of what you are getting.

4. How much does normal CPA services run and is it a upfront amount Vs. monthly?  That depends on what they are doing.  For someone small, you might want to do it in phases (i.e. a one-time project CFO to guide you that includes setting up your accounts & then as you grow adding a bookkeeper.  If you set it up right in the beginning, the CPA or even CFO could come in a couple times a year and tweak & even give you advice on expenses so that you always know your numbers.

5. Curious: when should I form an LLC?  lol I would tell you to do this immediately.  Protecting your assets & having the right structure is critical to both future growth & making sure that nothing nasty happens when you least expect it that you were not prepared for.

6. What states are the best to form them? I highly recommend you getting a DST structure if you are investing in California to avoid the $800 Franchise Tax.


Originally posted by @Joshua McMillion :

Hello,

I am relatively new to bigger pockets and real estate investing. Some background, I'm active duty military and recently purchased my first rental property. This property is currently rented, with the start date of June 2019. My family and I used a house hacking strategy and plan on continuing this strategy moving forward. This is the first year my wife and I contemplated using a CPA Vs. H&R Block, which is our usual method. Also, we have not formed an LLC but plan to within the next two years.

Question:

1. How should I search for a CPA with a focus on real estate and military?

2. What are the risks of not having a local CPA?

- we move every two or three years.

3. Is it worth hiring a CPA with only one rental property?

4. How much does normal CPA services run and is it a upfront amount Vs. monthly?

5. Curious: when should I form an LLC?

6. What states are the best to form them?

Thank you ALL in advance!

Sincerely Josh

 Hi Joshua,


Here is some information on finding an accountant. You definitely need someone qualified, does not have to be a CPA, could be an Enrolled Agent or an attorney. Just make sure they specialize in tax and have significant experience dealing with real estate investors.
Here is a great list of questions to ask a potential accountant:http://www.biggerpockets.com/f...
Also check out the www.NAEA.org page in your search. It should help you find someone local. If someone comes to me, I'll send them your way.
If you need help in your search or want to verify something don't hesitate to ask.

Steven, thank you for the information. I will review the URLs and I will be in contact if I have any questions.