Tim Bell explains why real estate investors need a CPA on their team, especially as their business grows. Look for one with experience in real estate and ideally 2-3 current investor clients. Verify references by asking permission to contact those clients directly.
The next person on our list after contractors is cpa. That stands for Certified Public Accountant. Okay? An accountant. You need somebody to help you keep track of your books, keep track of your expenditures and help you with your taxes, okay? Again, the reason this person is number four on the list instead of number one on the list is because it's not the most important team member you need right away to get started. Okay? As you make money in your business and as you're successful in your business, the role of your accountant is going to be more and more important in your business. When you're first getting started, if you have limited amount of time and you don't go out and create the CPA relationship or the accountant relationship, it's okay. But I do recommend that very shortly that's going to be an important relationship for you to have, okay? Because as you start to make money, you're going to have tax consequences on that money and you're also going to have write offs and various other different things that you need to deal with your cpa. Your accountant can help you to deal with those things without you having to learn all the specific rules. Now, in your interaction with your accountant, you will learn what the tax rules are, tax consequences of various decisions and all those various different things. But until you actually start making money, it's not super critical that you get a cpa. It's certainly fine to have them on your team. That's great. There's nothing wrong with it, but like I say, it's not super critical. It is somebody you could put a little bit on the back burner. Now let's talk about finding a CPA and what to say to them once you find them. Those are the two things we're talking about with team members. Number one, finding a cpa, okay? I strongly recommend that you talk with other investors and the president, owner, operator of your real estate investment club to find a cpa. Okay? One of the really, really important critical aspects of a CPA is they must be familiar with real estate investment. Okay? That's critical. You need a CPA who has at least two or three clients who currently invest in real estate. If that CPA doesn't have two or three clients that currently invest in real estate, probably ought to find another cpa. Again, the best way to find a CPA is the real estate investment club. Sometimes accountants hang out at the real estate investment club because they want to meet you. More often though, the other investors and or the president, owner, operator of the club will be able to refer you to a Good investor friendly CPA who is familiar with tax write offs for real estate investors and can help you. Okay, so that's really the best place to get them. Now, once you get together with them, once you find somebody, once you refer to somebody, your first question is, do you have two or three clients who currently are real estate investors? If the answer is no, I'd be a little bit skeptical about working with them. Okay, if they say yes, say great. Would you be offended if I called those two or three clients of yours and very politely, very nicely, not very specifically, but very nicely, I'm going to ask them about their opinion of how you are doing in regards to their taxes. Okay, Mr. CPA, will you or can you withstand that type of scrutiny? Now if they say, well, no, I don't think that's a good idea or they give you some excuses for you not contacting those people, then I'd be skeptical. Okay, a good CPA is going to be proud of their work and they're going to be proud of what they've done with their customers. And when you say, well, would you be offended if I just talked to a couple of your people who are your clients who are real estate investors, Would it be okay if I just contacted them and called them and asked them their opinion on the type of work that you're doing for them? Okay, a good CPA will not have any issues with that. They'll say, yeah, that's no problem. Here's so and so. Call them, call them, call them and they'll give you the information. Okay, so another good way to check them out to make sure that indeed they are investor friendly by talking to a couple of their real estate investor clients that they work with and that they do taxes for. Okay, that's the idea or the concept of a cpa.
