What type of attorney needed for a new investor's team?

Question

Hi All, I'm a new investor who is starting to build my team that I will need for my first rental property investment. The more I learn the more confused I get with regards to what type of attorney I need. At first I thought I just needed a real estate attorney to help me with contracts, purchase agreements, rental agreements, evictions, etc. Then I met a tax attorney who is very knowledgeable (and very expensive to me at $350/hr) who can help me structure my entity to best protect my assets and to provide tax strategies. He doesn't offer the real estate attorney services. Then I listened to BP Podcast #109 with Scott Smith who sounds like a very knowledgeable asset protection attorney. So do I need all 3? Will I likely still need a CPA if I use the tax and/or asset protection attorney? Will I have any money left to invest after meeting with these "team members", lol? It is a bit daunting for a newb who just wants to protect himself properly, avoid costly mistakes, and get started buying his first rental property. Any advice from the BP community? Thanks in advance!

Matthew Kreitzer · Answer

Tax attorneys are there for two reasons;

A) To give you a more indepth view of tax controversy. CPAs are good at letting you know what numbers go where or how you can qualify for specific exemptions. What they are not good at, and what they can't do, is tell you the result of a legal case should you have to go before the Tax Court of the U.S. District Court.

B) Representing you before either of the above courts should the IRS decide to audit you.

Do I think every business needs a tax attorney? Nah, you can mostly get by with a CPA, but it is good to know one when things do go south.

Adam Ulery · Answer

Thanks for the great replies. @Samuel R. Harden, I will attempt to find a firm such as the one you suggest, preferably in my area. Thanks for the tip about single member LLC. @Lydia S. I agree with you and was looking for a CPA until I attended a local REIA meeting where this tax attorney spoke. He was actually very knowledgeable and is also a CPA, but he doesn't do tax returns and sticks to the law side of his services.

Lydia S. · Answer

I'm  not clear on the role of a tax attorney. In my mind, I thought a CPA was the one who would assist with tax strategies. Or at least from the great advice the CPAs here on BP provide,  that left me with the impression that a great CPA was your go to person.

Samuel R. Harden · Answer

Depending on your market size, you should be able to find an attorney that does both, or at least a small firm with both types of attorneys. To use myself as an example, I am primarily a tax attorney, but I also handle asset protection and business structuring. I also handle simple to mildly complex contracts and have done some eviction work, and would pass off any complex contracts or foreclosure work to another attorney in my firm (we have four total) that focuses on those areas. So in my example, you wouldn't look for a tax attorney and a real estate attorney and an asset protection attorney, you would just find a competent firm that can handle all of that and consider them the one legal member of your team. Just as a rule of thumb though, the larger the firm is the larger their overhead is, so the larger their billable hour is.Also, be careful with your LLC in Florida if you're the sole member. Since the Olmstead case and the Revised LLC Act in 2014, Florida has far less protection in place for a single member LLC than the multi-member LLC. Your personal assets are still protected, but in addition to the charging order they can force a foreclosure of your LLC.

Cameron Skinner · Answer

you may be going a little over kill.  I had 40 or 50 properties before I ever met with an asset protection attorney and he said I did a good job of asset protection and did not recommend any changes.  I grouped my rentals is separate LLC not having too much equity in any one LLC.  Looks like your from Florida it's easy and inexpensive to set up Single member LLCs and they do not require an attorney, just go to sunbiz.org and file your articles of organization online.  You defiantly need a good lisenced tax professional on your team some on who owns investment real estate themselves to set up your structure for the best tax benefit possible, the wrong structure could cost you thousands in additional taxes. Private message me if you would like a referal.

Hope this helps good luck!

What type of attorney needed for a new investor's team?

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