It’s not about how much money you make. It’s about how much money you get to keep.

There are two types of CPAs:

1. Those who act like they work for the IRS.

2. Those work and fight for their clients.

I’ve fired number 1s and I pay good money for number 2s.

What I’ve learned:
You want a tax planner who gets aggressive, develops strategies for you to implement, and is prepared to take on the IRS.

You pay them good money for this.

You pay them to WORK FOR YOU.

But let’s think about the motivating factors:
Taking this approach is more work for the CPA. Bad CPAs don’t like doing work.

I had arguments with my first CPA about depreciation. He said getting aggressive was a bad idea because recapture taxes are significant.

He didn’t want to do the extra work.

I fired that CPA.
CPAs don’t have much to gain by getting aggressive.

They get paid the same and they don’t want to do the work to build a case and records that stand up to the IRS.

Most CPAs are afraid of the IRS.

The good CPAs welcome audits and have the records to FIGHT for you.
“My job is to keep you out of trouble”

Is what the bad ones will say.

Of course you have to keep me out of trouble.

Your job is to do that while you make a plan that allows me to keep more of my hard earned money.
The tax code isn’t black and white.

Sometimes you need to adjust your behavior to fall into certain categories. This is more work and requires more planning.

The safe route is the path of least resistance.

A solid strategy and bombproof records isn’t easy.
But it’s worth it.

Cost segs are worth it. RE pro status is worth it. Mileage logs are worth it. Accelerated depreciation is worth it. Home office expenses are worth it. Per diem is worth it.

Find a CPA who is willing to fight for you and isn’t afraid of the IRS.
Consider the personality type of most CPAs.

A type A, risk adverse, safe route kind of guy might not be willing to get aggressive with your tax strategy and use the code to your max potential.

If you know the code and your plan that’s fine. If you want help it’s not.
He / she is your consultant. Advisor. Strategist.

Far too many folks do deals without understanding the tax implications.

Far too many folks only talk to their CPA during tax time.

Get them involved!
A few more thoughts:

Your LLC structure matters. The tax treatment you elect matters. C Corp vs S Corp matters. The tax shield on an investment matters.

Your tax planner should be in your corner when you look at deals telling you what those deals mean to YOU.
And if you are looking for a good follow on twitter to learn this stuff, my CPA is here - @baldridgecpa He taught me all about this stuff:

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More from @sweatystartup

15 Jan
I got serious about Twitter on April 12th 2020.

Since that day:

I've raised $5MM and met with over 200 future investors in my real estate deals.

I've done $75k worth of consulting.

And I've met mentors and friends I'll carry with me for life.

What worked for me 👇👇👇
First of all I tried the mainstream advice and built my own blog, podcast, email list, YouTube. Spent 2 years. 500k downloads. Some success.

Got more value out of Twitter in 30 days.

If raising money or in business THIS is the platform.

Okay let’s go:
1. Stay on topic.

The most valuable folks here are here to learn. They curate their feed. They want business and to LEARN.

No fantasy football. No gifs. No pop culture. No one liner jokes.

Be an expert at what you do. Stay on brand.
Read 29 tweets
13 Jan
Why is it I could check into an Airbnb 8 years ago with no human interaction by walking straight to my room...

But I spend 10 minutes at a hotel front desk signing papers and getting a room key.

Who is going to automate this industry and cut $300k a year in payroll?
The front-desk employee sits on their hands and does absolutely nothing all night.

A great cleaning and maintenance crew is all you need! Cut the breakfast and workout room / pool as well.

Big opportunity to automate some of these small mom-and-pop hotels in tertiary markets.
I know Hilton offers this as an option. But they still staff the front desk.

99.99% of small town America hotels staff the front desk or have a family that owns it and has to sleep nearby.

I'm talking about this from the lens of an operator and cutting costs, increasing NOI.
Read 5 tweets
13 Jan
I sometimes act like an arrogant know-it-all on here.

But my opinions are loosely held. I do that to get better and I love it when you challenge me.

Keep holding me accountable and making me smarter!
A few things I’ve changed my mind on:

I think folks with no money can start in real estate through brokerage or leasing and make a lot of money to start doing deals.

I used to have a major extreme ownership mentality and if you weren’t successful it’s your fault.
I used to think self storage was superior to other asset classes but I know now I’ll have a diversified portfolio when I’m 60.

I think Bitcoin has a place and is a great hedge.

I think HCoL cities are decent places to earn great yield and appreciation can’t be underestimated.
Read 34 tweets
11 Jan
If you trace back the lineage of the great real estate families who hold millions or hundreds of millions in property you’ll always find that one person who started it all.

The person who didn’t have the capital but created some through entrepreneurship.

👇👇👇
The person who didn’t have the knowledge but took a chance, made the best decisions they could given the information they had, made a lot of mistakes, but found a way to build wealth through real estate.
They took what they learned and slowly but surely multiplied it over the years. Rolling the family wealth snowball down the hill.

I didn’t come from a real estate family.
Read 5 tweets
9 Jan
Why do most real estate folks sell their properties?

Because most aren’t real estate investors at all. They run a service business and they get paid in fees when they buy and in promotes when they sell.

True investors get paid by owning great assets for a long time.
Okay okay it’s still real estate investing.

But if you need to buy and sell every 2-4 years to make money and you stop working the money stops coming.

Finding a structure and getting enough capital into the stack that allows you to make enough money while you own it is the key!
If you can find a way to hold real estate for 10+ years that’s when the magic happens.

And it’s when you make money doing nothing but waiting!
Read 10 tweets
8 Jan
Amidst the chaos this year folks forget the following industries all had record sales / performance in 2020:

Exercise / fitness
Car sales
Groceries
E-commerce
Electronics
Video games
Domestic appliances
Furniture
Ghost kitchens
Online meeting platforms
PPE suppliers
Dating apps
Cybersecurity
Online teaching
E-learning
Online fitness
Children's Toys
Entertainment streaming
Food delivery
Divorce attorneys
Bicycles
Gardening
Outdoor experience venues
ATVs UTVs Dirt Bikes
Snowmobiles
Motorcycles
Photography equipment
Hiking supplies
Running shoes
Yoga supplies / online platforms
Cooking supplies
Painting supplies
Chess
Woodworking
Tools of all kinds
Guns and ammo
Pottery
Guitars and instruments
Pools and spas
Videography equipemnt
Craft beer
All alcohol
Home-brewing
Beekeeping
Interior design
Read 9 tweets

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