Anyone is CPA + Real Estate Agent

  • This topic has 6 replies, 4 voices, and was last updated 4 weeks, 1 day ago by AsianNinja.
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  • #2070020 Reply
    AsianNinja
    Participant

    Is anyone on this forum both CPA and real estate agent or planning to be both in future? I want to invest in real estate in future in order to create passive income but I do not have knowledge about this field. That's a reason I want to become a real estate agent and see how it goes. Also, I think being a CPA can help giving tax advice to the buyers. Do you think this combo is good to pursue?

    Does anyone have tips to pursue this path?

    #2070032 Reply
    animalwithin
    Participant

    You really don't need to be an agent to be successful in real estate. My dad is a CPA with several dozen real estate properties and he runs circles around most every agent he comes across. All of the other successful real estate investors I know aren't agents either.
    I work in my dad's firm and have spent a lot of time in real estate and have my own properties and I already know more than most agents just starting out.
    Best way to get into real estate investing is to learn from someone and then supplement with the internet (biggerpockets.com is excellent for REI). You could also get into property management and learn real estate through that as I did when I first managed my dad's residential properties back when I was in college.
    I'm combining accounting and real estate investing so it's definitely doable and very lucrative, go for it.

    #2070092 Reply
    ultrarunner
    Participant

    If you are a real estate agent, you are not allowed to give tax advice to the buyers. Also, if you are a CPA, you are not allowed to give real estate investment advice to the buyers. However, I am not sure how a person with both licenses will go about the rules. As far as I know, all license professionals must abide by their own boundaries (governed by the board). It won't hurt to pursue both though.

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    #2070116 Reply
    AsianNinja
    Participant

    @Animalwithin Thank you for your tips and your background is really great. Also, I wanna to know if you have meet anyone who have both licenses and having CPA full-time job but do selling houses as a part-time agent like over the weekend. Is it possible?



    @Ultrarunner
    I know that agent is not allowed to give tax advice, but being a CPA license as well may allow you to do that? I hope someone has been in this situation can answer this question.

    I am a CPA and have a full-time job. Now, I'm just thinking about passive income, especially real estate investing, and becoming a part-time agent not only helps me gain experience in this field but also maybe earns some extra cash for this purpose. 😀

    #2070566 Reply
    animalwithin
    Participant

    @AsianNinja, anything is possible.
    If your goal is to gain experience in real estate and build an investment portfolio on the side for passive income, becoming an agent is taking the LONG way to doing that. You can get much better experience and get into the industry much quicker by being around real estate investors and committing yourself to studying the field on your own. If I remember correctly, to become an agent requires taking several real estate classes, licensing exams, and you have to work with an agent for a year (I could be off on the details).
    I've never met a very successful real estate investor who was an agent, just food for thought.

    #2245260 Reply
    jheathhuggins
    Participant

    I do both. To start with I have always been teal estate investor first. I later got my broker license. A real estate license is not required to have to buy and invest in real estate. You can buy property and flip it without license. You only need real estate license if you will represent client in buying or selling real estate for a commission. Some state have different rules/law about property management for commission. Check with your state law for both ways.

    I now do real estate brokerage part time. My full time job is business/financial analyst in healthcare industry. If you are talking about representing buyers or seller in real estate and you are working other full time job, it is harder to get real estate clients. It is more true if you are working with buyer clients that might work opposite shift of your full time schedule. It is easier with seller client.

    The property management service is flexible, unless emgergency happens.

    Managing your own investment properties or rehabs to flips is not that bad on your time. It will get to the point where you are better off paying people for most manual labor.

    I do know a CPA that does both as his own business blended full time together. In his case he does a lot of taxes in 1Q and make enough money to cover most of his living expenses for the rest of the year, then his real estate brokerage service occupies the other time. He also does employ real estate broker under him at his own firm.

    Some folks are able to pull it off and provide a great service. The same goes with that some have enough working capital to make things smoother.

    I have dealt with some real estate client prospect that clearly states that they want full time agent. I would say it also depend on where you live. If you live in area where median price is higher than my area, then few house sold will make you good money vs having to sell more volume to hit your target. For example: My area median price 130k commision is about $1,700 to $2,500 (depend on % and if other firm is involved) compared to area where median price is $300k or more then commission is about $4,500 to 6k. If you wanted to earn 50k commsion a year then think about the volume difference.

    Then consider that there is too many agents now. I bet you that you know at least 3 realtor friend and have also have a family member/relative that is a realtor.

    The only reason I am
    Keeping my license and doing it part time is to make it easier to maintain my status as real estate professional for tax purpose. That way when my investment grow and I acquire more properties, I have more unlimited passive loss. Which means you can now use cost segregation method to get bigger loss and recoup investment back faster to reinvest in more deals.

    AUD - 85
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    J. Heath Huggins, MAcc, Broker

    jheathhuggins@yahoo.com

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    #3314874 Reply
    Cristenia Anderson
    Guest

    Hello,

    I am a very part-time real estate broker and I am currently a master's accounting student studying to eventually take my CPA exam. Yes you can do both. As a real estate broker you cannot give tax advise. However, I believe you can if you are also a CPA. This may depend on the real estate brokerage you are with as you will have to be associated with a brokerage for a time, depending on your local rules, until you can become a principal broker. That brokerage may have issues with it because they may find it as a potential liability. I am also a licensed loan officer and a lot of brokerages I've interviewed do not allow you to be both on a single transaction, certain government backed loans you can't anyway. There are supposedly additional tax benefits to being a real estate broker and investing in your own property, maybe investigate that further. However, even if you broker your own deals the brokerage expects its cut, but maybe that is less than hiring an agent to handle the transaction for you, if you do hire one. There is training, memberships, and continued education requirements to maintain your real estate license but that's probably similar with being a CPA. Additionally, as jheathhiggins noted, if are areal estate broker part-time and want to work with clients, it is pretty difficult and maybe won't get as many clients as you would like because you really have to be constantly marketing yourself. There is so much competition out there (so many real estate brokers). I hope this was a little bit helpful.

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