A CPA who has a goal of building a commercial real estate firm

Hi guys. I am really thankful for being part of this forum. You guys are fun and helpful at the same time. I will just tell you my little story and I would really appreciate the help, advice and support I will get from you.

I work as a CPA in a private wealth mgt. firm in Palo Alto, CA turning my third year but I don't want to do accounting any more. I have a goal of owning a commercial real estate business one day where my firm would develop, own and manage commercial real estate in major cities around the states.

But I am lost ! I don't know what to do? How can I break into commercial real estate? what type of job I should start with that would lay the foundation for the knowledge and skill I need to develop and hone to better achieve my goal?

I've been told to start as a commercial real estate broker in a brokerage firm. But I don't know how accurate is that step. And also how to break into brokerage given my background as a CPA?

So I would really appreciate if you can help me figuring out the right steps I should take to start working on achieving my goal?

Thank you so much.

 

My advice would be to get a job in the industry ASAP. You might be working for a property management group, or perhaps a real estate Asset Management company would be great as well. They are always looking for CPA's to be financial analyst. The beauty of the CPA is it's so versatile and you can break into pretty much any industry through an accounting role.

Once you're in the industry, learn as much as you can, do great at your job and try to break into the deal side/property management side.

 

Agree with the above - except that I would stress that you should try to find a role outside accounting. If you can get an analyst role within an Asset Management or acquisitions group, the experience will give you a much better view into the business. Or even if you can join in with a small investment shop on the accounting side, that might give you visibility outside of your group. Working for a big company in the accounting department likely won't give you the experience necessary to set out on your own. Obviously YMMV and there are examples out there to the contrary but this would be my $.02.

 

Mahmoud4Adam thank you for this post. I am a CPA in the same position as you except I work in real estate tax at a CPA firm instead of wealth mgmt. My current job is better than my previous one because I am actually on the real estate team at my firm. However, I still only get to do tax returns. Although I learn a lot about deal structuring working on the returns (waterfall allocations, preferred return, target capital, etc.), I am still not as close to the assets as I would like to be. At the end of the day, I am still only preparing the tax returns. I have been told that an analyst role is a good place to start. However, it is much more difficult for a tax person to transition to something outside of accounting than it is for someone who took the audit route.

I have decided that I am done with the tax return rat race. This is my last busy season. I refuse to do this next year. I plan to hone my excel skills and start my job hunt after busy season. Hopefully, someone will see the value in my real estate tax accounting experience and give me a chance. In the meantime, I am considering going back to school. I think I will plan to submit grad school applications sometime this fall just in case I am not able to find a job outside of tax before next busy season.

 

If you're a CPA and want to run your own real estate business then raise the money and do it. You're not going to break into the industry the way you want to. Your only other way in is sales (brokerage), and that is a huge financial risk. Or, get an MBA. That's an expensive but safe way to break into the industry. The less expensive method would be to get a real estate masters.

But I know plenty of dentists, doctors, and other higher class professionals who own plenty of real estate. Your ticket to the industry is to raise the money and do it. There is no career path for you. No one is going to hire you as an analyst unless you go out of your way to conceal your CPA and current (then prior) career, and you won't be experienced enough to get on in a more senior capacity. So maybe an MBA is a good route for you.

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Best Response

I think you might be able to leverage tax skills with a developer or operator; I'm amazed at how some of these guys pull off deals utilizing super creative and complex structures loaded with tax plays for either themselves or jv partners - so I would start there and see how you could apply those to any developers utilizing them... maybe look for big projects in your area with a lot of public support (because there will def be tax plays and highly structured deals behind the overall project) and who the sponsors are, then see if you know anyone there, or if they are openly hiring for analysts/associates.

3 years out of school is not old at all, and depending what shop it is, an analyst or senior analyst salary/bonus is probably comparable, or maybe higher, than what you are making now as a tax accountant.

Mainly, if you're going to start looking to score a job at a sponsor/developer/small PE group, I would start learning as much as you can about the financing of real estate projects. Read market reports of your area, read real estate finance books, read up on real estate valuation, urban planning, etc... if you're coming from a non RE background, you're going to want to understand the lingo, and how these people look at dirt, neighborhoods, old buildings, and new office towers.

I think it will be a strength that you understand how old rich people have to shuffle money, raise and keep track of their money in partnerships, and generally stay off the IRS' radar (I'm assuming you understand these kinds of things because you say your background is a CPA in private wealth management).

Other than that, I agree that seeing how the machine works as an analyst up to VP in acquisitions or development at a quality shop will give you great insight and a foundation to one day start your own little empire. Then again, you're a CPA and naturally risk-averse so you might end up losing everyones money and your children will be poor and everyone will hate you.....

 

Disagree with the above. RE developers don't need your accounting skills. They already have third party accountants who they pay handsomely. Regardless, tax rules for real estate isn't rocket science--they probably already know most of the tricks anyway. And they've got estate planners to plan their estates. As a guy who comes from a family of accountants, I just don't see the value of a CPA with tax background to a real estate group. All that says to them is, "I have to overpay for a guy who thinks he knows more than he does".

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