All Forum Posts by: Heath Jones

@Kris H. It’s not about getting an emailed question answered for free. I understand what a consultant business is and that time/advice are their services. It’s about asking the BP community whether or not I’m being overcharged for this service, which is one of the great things about having a platform such as this to turn to when you want to make sure you’re not being taken advantage of.

This is also about asking the question... if they are going to charge me to answer the email, is it not reasonable for me to expect them to let me know how much it will cost and let me decide if I really want to proceed with getting that question answered at the price they are quoting BEFORE they use their time and bill me? Thank you for your comment.

@Michael Plaks

You make a great point. For me, the question in regards to pricing is important to whether I chose to fire the CPA. This is because I was specifically told on three separate occasions by the CPA throughout the year that it would not cost more than 2k, then I get a bill for ~2700. Understanding whether this is a reasonable price is critical to my decision to work or not work with someone who does not hold to what they’ve told me.

For example, if the feedback I would have gotten from the BP family was that this was an extremely low cost and that work of this kind is typically on the order of something much higher, like 3-8k, then a $700 increase (despite telling me one thing and doing another) may make more sense given this context.

However, given that this is not the case and most feel this is on the more expensive end, then the lack of transparency is concerning no matter how great of a CPA he is.

Thanks for the feedback!!!

@Daniel Hyman See above 😁

@Caleb Heimsoth

See above 😁

@Natalie Kolodij

See above 😁

@Lance Lvovsky

@Daniel Hyman

@Caleb Heimsoth

@Natalie Kolodij

I’m not sure why my response didn’t tag you all. Look above (or below?), I responded to all your comments/questions. Thank you so much for your feedback. Any additional recommendations after reviewing the new information I provided would be greatly appreciated. I will keep the post updated for anyone who is interested. Take care and stay safe!!

Hey Everyone,

Thank you so much for all the feedback and comments. It is very much appreciated. Answers to common questions in the comments. In 2019, my wife and I bought a 4 plex (in FEB) and a 16 unit (in MAR). We originally formed what has become our operating LLC, but then formed one LLC for each property for banking purposes. There were no 1031 exchanges; however, we did cash out my 401K with my previous company to buy the 4 plex. We ended up getting ~36k with 6k being withheld to cover the tax penalty. The 16 unit is owner financed.

@Lance Lvovsky 

The engagement letter states the scope of work would include the preparation of 2019 federal and state returns from the information I furnished to them. They will NOT audit or otherwise verify the data I submitted to them, they do NOT perform procedures designed to discover irregularities, should they exist. They will render such accounting and bookkeeping assistance as determined necessary for the preparation of the income tax returns.

In October of 2019, I asked for a review of my tax situation to make sure I was still on track with my federal and state withholdings, because I wanted to make sure I wasn't going to owe money as a result of cashing out my 401K. So I understand being charged for the hours it took for that service.

As far as my books and records, I use Quickbooks and my account is linked to all my business accounts and credit cards. I also use Rentec Direct for bookkeeping for all the rental P&Ls. I keep extremely detailed notes and comments, and I sent all the summary reports that were asked of me.

@Natalie Kolodij

This is why my wife and I were OK with moving to a higher-end firm because we are proponents of paying for quality. However, after reviewing the engagement letter, it does not appear that my firm "confirmed/tied down a lot more than many firms do". No 1031 exchange or 3115, so I do not believe there were any curveballs. It was all pretty straightforward, P&Ls from the operating LLC (which had all the information for all the business entities) and then separate P&Ls for the two properties. I will certainly reach out to CPAs on BP, and have already had a few get in contact with me. Thank you so much!

@Daniel Hyman  @Caleb Heimsoth

One operating LLC, and one property in each of the other two LLCs. I think the books were clean. Basically, the books were tracked and updated using Quickbooks and rental management software. I'm extremely diligent, so I don't know how I could have made them any cleaner. No other complexities. Just a W2 and then all the Schedule E stuff.

I do not believe I asked complex questions. I did ask for a 3/4 year review and the other question was about the tax implications for a potential seller of a large MF property if they were to reinvest a portion of the sale as a passive investor with us, the potential buyers. 

I tried calling twice today, but I was not able to get a hold of them. They are a reputable firm with several locations around the country, and I really like my CPA. But I am not going to keep working with someone who tells me one thing and then does something else. I will post after I speak with him for the benefit of anyone following this post. You all have been great. Thanks!

QUESTION: Is $2684.25 a reasonable price for CPA to file personal Federal and State tax returns which included 3 sole-member LLCs, all used for operating multifamily REI properties?

BACKGROUND: Last year, my wife and I decided to go with a recommended CPA. Since we started our REI business and we're starting to own more property, we thought having someone a tier or two higher than H&R Block would be a good idea.

So we had them file our taxes for the previous year in which I was the only one working, wife is home with kids, and we hadn’t bought any real estate or formed any LLCs. Just a simple return. Something we could have done on turbo tax for $39.99 or paid $229 to H&R Block to do (both of which we have done previously).

Before we went with this CPA, they were very transparent about being on the higher end of services. Well, the CPA did get us a larger than usual return, but also sent a bill for $900. I guess my wife and I were thinking higher end might have been $500-600 or so we were a little shocked it was so high for just a simple return.

From that point on, we asked that they let us know upfront about how much services would be so we can better budget for them. I specifically asked how much will the bill would be this year given that we formed an operating LLC and two LLCs for banking purposes for the two multifamily properties we bought in 2019. On three separate occasions, we were told it would not be more than $2000 total.

Side note: Throughout the year, I emailed a couple of questions, which I was told (after receiving a $575 bill) that each question required a couple hours of research and work to get a “detailed and factual” email response back to me. After that bill, I pleaded that they inform us of what the cost of services would be for any work they would need to do and to let us know BEFORE so we could choose if we wanted to proceed or not. Then, I again getting worried asked about filing tax returns and asked if they would still be $2000 or less, and was led to believe that “yes, that about what’ll be”.

Well, we got a bill for $2684.25 and my wife said we are moving on from this CPA and finding someone else who “won’t charge us $575 to answer a couple of email questions”. To be frank, I agree with here.

Alright BP community, sorry for the novel, but are we being ridiculous? Is this a typical cost for these services? Any feedback would be greatly appreciated!!

@Mindy Jensen

Not enough 2-3 months

@Sienna Parker

Look up Damion Lupo and the eQRP, then talk with him about your options. You can use the money you’ve already saved in your 401K to buy real estate. Good luck!