Accountant says don't invest! Confused.......

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Accountant says don't invest! Confused.......

Thomas Morlan
Granger, IN · Member since 2014 · 2 posts · 5 votes

His exact words....'Don't F@#$*&G do it!!!!!!'.  

I am very confused now.  I have been researching/reading books, blogs, podcasts, anything I can find about real estate investing over the last month or so, trying to learn as much as I can and find the right property to begin my journey into the real estate world, and then he drops this bomb on me.  Talk about bubble bursting, sheezz.  

Allow me to introduce myself and my aspirations.  I am a 44 y/o full time optometrist (eye doctor) practicing and living in Northern Indiana.  My modest short term goal for 2015 was to purchase my first 2,3 or 4 unit multifamily home which produces positive cash flow and see where that takes me.  I have a very important and secure job and am very happy being in the healthcare field.  However, because it cost so much to go to optometry school (any medical school for that matter) I still find myself with a 6 figure student loan note, even after practicing for 15+ years! I tell everyone that having this student loan is similar to owning a second house/mortgage.  My actual mortgage costs $1350/mth and my student loan cost $1050/mth.  It's depressing and my hands feel tied because there is very little, in fact nothing, you can do with federal student loans as far as refinancing.  

Consequently, I do not have much in the way of cash to invest with.  This, by the way, is my accountants main reason for his adamant and very blunt and to-the-point advise.  I believe he subscribes to the (paraphrasing here) 'Dave Ramsey Book of Real Estate Investing', in other words, if you can't invest with 100% of your own cash, it's not advisable.  I tend to think it's a very safe, conservative, and maybe even old fashioned approach, but I don't have personal knowledge of clients who have lost hundreds of thousands of dollars either, as he does.  

When I mentioned all the hundreds of success stories I read about on BP.com and elsewhere, his reply was that for every hundred of success stories posted online.... there could be, and likely are, thousands of failures not posted.  The difference is that the failures are not going to post online (or anywhere for that matter) their failures like someone who will post their success and wants to tell the world.  I'll have to say.... has a point there!?!?

I don't want to give up on my real estate investment dreams, but I just don't know what to do.  Anyone with similar advise? How did you handle it?  Thanks

Tom

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Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
11y

@Thomas Morlan First. Dave Ramsey isn't an investor...he's a saver (pay down debt)...not the same thing.

Second, your accountant isn't an investor, he's also a saver (efficient use of limited funds)...not the same thing.

Third, those of us on BP (for the most part) are investors (eliminate the limits on existing funds)...and it sounds like you want to do the same thing.

My thoughts?  Watch/listen to Dave R. for entertainment purposes, listen to your accountant to save you money, and listen to other investors to learn how to invest.

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  • Jon Q.
    Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votes
    11y

    @Thomas Morlan

    Welcome to BP!

    With your first post, you're already learning the importance of risk management when it comes to investing.  Id suggest gathering all the information you can, then making a decision based on this info and the risk/reward involved. Keep in mind that, unless they are investors themselves, accountants and attorney's should be used for their expertise ONLY (accounting and law).  This is why they're not investors.  

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  • Jon Q.
    Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votes
    11y

    There is a reason why they're still working for a paycheck and not investors.

    0Reply
  • Brandon Hall
    CPA · Raleigh, NC · Member since 2013 · 1k+ posts · 2k+ votes
    11y

    This thread is giving accountants a bad rap so I wanted to jump in.

    I feel like in the real estate game, you aren't looking strictly for an accountant. You also aren't looking strictly for a tax expert. You are looking for an advisor who can offer you holistic services. There are accountants out there who can fit that bill!

    And this is why you always see me and @Steven Hamilton II posting on threads where people are asking for local referrals. We always say "we serve clients domestically and globally" and the reason for that is people are looking for a real estate savvy accountant that they can relate to and they may or may not get that with the local guy. But by broadening their horizons and seeking accountants in *potentially* a different time zone, clients expose themselves to a much wider pool of accountants and will likely have better success at finding someone that can meet their particular needs.

    I used to say that you don't necessarily need an accountant who invests, just one who's practice is primarily made up of real estate investors. But in order to relate to your accountant, you really do need one that invests as well. My personal investment experience allows me to critique deals, analyze portfolios, and offer that holistic tax, accounting, and financial advice.

    Know this: not all of us accountants slug away at a 9-5. The good ones are also entrepreneurs who are actively building a practice to meet a particular need. When you are vetting accountants, it will be beneficial to talk with the overseers, not the worker drones, as they will be able to see the big picture and better understand your needs.

    Hope this helps boost our rep :)

    3Reply
  • Steven Hamilton IIPro Member
    Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
    11y
    I'm right there with @Brandon Hall.  I invest and I know the business in an out. His comment about many of us being entrepreneurs couldn't be any more true.





    Originally posted by @Brandon Hall:

    This thread is giving accountants a bad rap so I wanted to jump in.

    I feel like in the real estate game, you aren't looking strictly for an accountant. You also aren't looking strictly for a tax expert. You are looking for an advisor who can offer you holistic services. There are accountants out there who can fit that bill!

    And this is why you always see me and @Steven Hamilton II posting on threads where people are asking for local referrals. We always say "we serve clients domestically and globally" and the reason for that is people are looking for a real estate savvy accountant that they can relate to and they may or may not get that with the local guy. But by broadening their horizons and seeking accountants in *potentially* a different time zone, clients expose themselves to a much wider pool of accountants and will likely have better success at finding someone that can meet their particular needs.

    I used to say that you don't necessarily need an accountant who invests, just one who's practice is primarily made up of real estate investors. But in order to relate to your accountant, you really do need one that invests as well. My personal investment experience allows me to critique deals, analyze portfolios, and offer that holistic tax, accounting, and financial advice.

    Know this: not all of us accountants slug away at a 9-5. The good ones are also entrepreneurs who are actively building a practice to meet a particular need. When you are vetting accountants, it will be beneficial to talk with the overseers, not the worker drones, as they will be able to see the big picture and better understand your needs.

    Hope this helps boost our rep :)

    [email protected]224-381-2660
    1Reply
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