Offering Advisory Services to Real Estate Investors

Advisory.

It’s that buzz word that we all keep hearing. Accounting journals, CPE classes, books, podcasts, etc., all telling us that we need to start making the shift from compliance to advisory if we want our tax and accounting firms to survive in the 21st century.

Of course, that advice is quite accurate. As more and more compliance services become automatable with advances in technology, and then actually automated when that technology becomes affordable and accessible at the level at which your clients exist, an existential threat to the compliance services you provide emerges. Even worse, you may have already noticed that larger public accounting firms are starting to reach down market to provide compliance services to the type of clients you historically service, because they’re able to do so more cost effectively now due to application of the aforementioned technologies.

So yeah, advisory needs to be part of the roadmap for the future of your firm.

But here’s the fun follow up question: What exactly is advisory???

That’s a serious question, not a rhetorical one. Do you have a full understanding of what advisory services actually entail? When you break down the specific tasks that you perform a client, can you successfully label the ones that are “advisory” versus the ones that are “compliance”?

It’s a more complicated task than you might think, depending on the services that you’re used to offering to clients. Many of the accountants and tax professionals I speak with have a difficult time with this. If you hang out on any discussion forums, LinkedIn groups, sub-reddits, etc. for our profession, you’ll find that this conversation is a frequent one.

I am not going to profess to being an absolute authority on this subject, because I’m not. As an example: Based on personal experience, I do feel quite authoritative in my ability to distinguish the compliance and advisory aspects of IRS Collections representation, but I’d have a much more difficult time doing the same thing for Examination representation.

If I may, however, I’d like to offer a “working definition” of compliance vs advisory, couched in terms of the deliverables to the client:

  • Compliance services generate work product that is used to meet the demands of regulatory agencies.
  • Advisory services generate action items for the client that they can use to make business and financial decisions.

I’m sure some reader somewhere will nitpick my distinction, but this is how I few them in broad terms.

Now, let’s do an exercise. Let’s pick a niche target market and break down the services that you’d offer to that target market, and label them as compliance or advisory. Hmm, what random target market can I think of? I dunno, let’s go with, uhh, real estate investors. Yeah, that’s a good choice.

Real estate investors are a massive sub-niche for tax services. About 1 in 15 personal income tax returns in the US shows at least one rental property on a Schedule E.

What financial services do real estate investors need, and which ones fall into the compliance vs advisory bucket? This list is no all inclusive, but it should illustrate the idea. Here we go…

Compliance:

  • Rental property expense tracking
  • Recording incoming rent payments
  • Issuance of 1099s to contractors
  • Properly allocating between repairs and capital expenses
  • Tracking of mileage
  • Logging monthly activities for 199A
  • Preparation of Schedule E

Advisory:

  • Pre-purchase financial analysis to recommend purchasing a specific property or not
  • Creating action plan to help client increase their FICO score
  • Conducting market research to determine current market rents
  • Working with client’s mortgage lender to help them reach an underwriting decision
  • Working with an engineering firm to conduct a cost segregation study on a building
  • Incorporating client’s rental portfolio into a holistic retirement plan

See the difference? To me, the difference is night and day.

Can you also see the massive difference in the type of client that is going to use only compliance services, versus both compliance and advisory? The advisory client is a higher quality client, and will pay you premium fees.

Oh, what’s that? You don’t think anybody would ever pay for those things I’ve listed above under advisory? If that’s what you think, then I’m here to tell you that you’re flat out wrong. Around the country, there are a tiny handful of accountants, tax pros, and financial planners that provide exactly those services to real estate investors — as well as the compliance services. Yes, there are non-accountant financial planners that do those things, but also do the bookkeeping and tax prep for those real estate investors — because those compliance services don’t require a license AND because of the fact that YOU aren’t offering the advisory services. Clients want the one-stop shop, and will take their business to where they can get the complete service package.

Now, how many accountants, tax pros, and financial planners are providing this level of service, including advisory, to real estate investors? Very, very few. It’s completely a guess on my part, but I’d be shocked if the number exceeded a few hundred practitioners — nationwide. Most real estate investors rely on other investors they meet at real estate investor groups, or maybe on their real estate agent, or try to figure it out from books or expensive seminars and courses. The number of real estate investing “gurus” out there is insane, and most of them are total con artists. But, they proliferate because competent professionals that are willing to offer these advisory services are just too few and far between.

That creates opportunity for you.

Why aren’t YOU helping real estate investors with deal analysis?
Why aren’t YOU helping them with financing?
Why aren’t YOU helping their credit scores?

It’s probably because you don’t know how. But, like with all things, it’s a skill you can develop.

Just a couple hours ago, I got finished teaching the very last new IRS Collection representation class that I’ll probably ever create. I’m going to take a break for a little bit, so don’t suddenly expect me to start teaching all this advisory stuff for real estate investing.

Fortunately, though, you don’t need to wait for me to create such a thing, because it already exists. And if you thought the 120-hour CTR curriculum was long and intense, well, you ain’t seen nothing yet.

See, my best friend, James Orr, has created over 200 hours of incredibly detailed technical training on all things real estate investing. Sure, there’s no CPE credit to be had, and it’s presented from the standpoint of the real estate investor themselves — not you as an advisor — but the training is still incredibly valuable. It is quite literally the most valuable real estate investing advisory services training that I’ve ever seen.

Oh, and it’s only $27.

Not $27,000. And yes, such real estate investing courses do exist, and they don’t cover even a fraction of what James covers.

Not $2,700, which would still be a bargain.

Not even $270.

Just a measly $27.

James calls it the Treasure Chest, and you can only get it here:

https://realestatefinancialplanner.com/treasure/

Again, yes, the training was recorded for real estate investors, to teach them how to do stuff. But the fact of the matter is that it’s the exact same training that I would present to you for CPE purposes to train you how to do the work. In fact, after a little bit of a break from teaching, I’m probably going to hit James up for permission to re-teach some of these classes as CPE. That may or may not happen, I haven’t decided yet. But either way, what matters is that you build the SKILLS for performing the advisory services in a competent manner, and this $27 Treasure Chest contains everything you need to build that skill set.

Just for the record, I have zero ownership interest in James’ company. I’m not getting paid to send you to his offer. I don’t collect an affiliate fee. None of that. I literally have zero financial incentive for sending you to the Treasure Chest. I have simply attended enough of his classes to know how amazing they truly are, and to know that they are perfect for training YOU how to deliver these advisory services to real estate investor clients.

Snag it today before James changes his mind and adds a few zeroes to the price tag:

https://realestatefinancialplanner.com/treasure/

To your success,
~Jassen Bowman, EA, CTR, NTPI Fellow

Ready to get more out of your tax firm?

Enter your email address to learn how.