what professional would i got to for real estate tax and income?

Question

I'm just starting out as a Real Estate investor and looking into educating myself a bit on the legal and tax aspect of owning investment properties. Who would be the best professional to go to for paid advice?

Michael Plaks · Answer

@Luis C CenicerosA slightly different opinion here. While it is understandable and admirable to want tax and legal education, it may be too early. Or rather, less important than real estate business education.I have been working exclusively with investors, for over 20 years. I know too many of them who attended every seminar, talked to every CPA and attorney in town, read all the books - yet, they have only done 2 deals in 3 years.Without a solid business plan or, better yet, some early experience under your belt, any conversation you would have with professionals will be very broad and generic. In other words, not too helpful. And for broad and generic information, there are excellent books that you can read. They will cover more than you can discuss in an hour with an expert, at a fraction of the cost. Yes, I said cost, because I'm one of those meanies who do not provide free consultations.But even if you get it for free, you would be much better off spending your time and energy on doing deals. Then, once you figure out in what direction you're moving, accountants and lawyers can help you optimize your business.Speaking of figuring out your direction - now that would be something well worth paying for early on. We do a lot of those consultations in my office.Good luck in REI business!PS. One minor detail. Someone mentioned tax attorneys. No, you do not need those. Instead, you need a good real estate attorney once you are ready to get going.

Nicholas Aiola · Answer

@Luis C Ceniceros Typically, at least with the tax pros here on BP (from what I gather), no one really charges hourly or time-based fees (myself included).Not only is it an outdated billing method but it's counterproductive for a successful tax planning relationship (especially when dealing with real estate investors). You want to have an open line of communication with your CPA at all times; you shouldn't have to worry about how much a phone call or email is going to cost you.Constant communication is needed throughout the course of the year because REIs always have so many things happening at once and everything has some sort of tax consequence or implication.What you're paying for is value... Someone who knows the tax law and specializes in real estate.There are a number of great CPAs here on BP. Most (if not all) will give you a free consultation, which is basically a phone call to see if there's some synergy, if there's an opportunity to work together, and some initial, high-level guidance. Reach out to a few and see who is the best fit for you.Good luck!

Dave G. · Answer

@Luis C Ceniceros Good advice in the other posts. Recommend you also join a local real estate investment club and rub shoulders with other savvy & experienced investors. You'll learn from them about all aspects of investing, to include the legal and tax aspects of buy/hold investing. You'll also get referrals of good professionals to hire when the time comes.

Basit Siddiqi · Answer

@Luis C CenicerosIt is likely that the tax/legal questions that you have have already been asked and answered here on Biggerpockets.Yes - every situation may not be the same and your case may be slightly different but BP search function will be a good start.I will also echo what @Michael Plaks suggests that you should first atleast have a business plan before you communicate with a professional.A detailed specific question will lead to a detailed specific answer.A generic question will lead to a generic answer.

Gita Faust · Answer

Also look into:- Bookkeeper (hire someone) so you can concentrate on building your assets and equity- CPA advisor (not just tax prep) and at least meet with them every three months with your financials- Real Estate Attorney - may sure they are in sync with your CPA Advisor- Tax Preparer - could be an EA or CPA. Make sure CPA's license is activeWish you all the best.Gita Faust

Luis C Ceniceros · Answer

@Nicholas Aiola thanks for the thorough reply and filling me in. Im trying to cover myself in the financial and legal aspect of things before ending up overseeing tax benefits or unforseen financial issues.

Sam Shueh · Answer

CPA with financial planner licenses.

Michael Plaks · Answer

Excellent advice on local networking. But be VERY careful learning taxes and legal from fellow investors. More often than not, they exchange some hearsay and myths that are not true. This forum confirms it daily. Some investor suggests a solution that they have been using for years, and then lawyers and accountants chime in, explaining that they have been doing it wrong.

Nicholas Aiola · Answer

@Luis C Ceniceros Credit goes to you for wanting to put everything in place early.Feel free to PM me if I can be of any help!

Luis C Ceniceros · Answer

thanks- do you have any idea of what the process of hiring one would look like? is it a few hundred per visit or is it a contract over a period of time? .... this is an foreign concept to me and would like to know as much as i can before going that route.