How to Find a Financial Planner for Real Estate Investors?

By Cynthia Meyer, CFA®, CFP®, ChFC®

What you will get from this article:

You’re building and scaling your real estate portfolio, and as your financial life gets more complex, you have more questions.  

Are you on track to be “work optional” when you want to leave your job? Are you doing everything you can to optimize your tax situation and protect your assets? Can a financial planner help you if you’re a real estate investor?

You’ve tried to talk to some financial advisors, but they all seem focused on the stock market and don’t seem to understand your real estate.

Financial planning should be personal, not cookie cutter

Working with a financial planner can (and should) look different for everyone. A financial planner helps you create a clear, practical, and personalized plan for your financial life. This is a collaborative process that helps you make wiser, more comfortable financial decisions to move you towards your goals and help you eventually achieve them.

When should a real estate investor see a financial planner?

How do you know if you should work with a financial planner? First, let’s think about what goals you want to achieve.

• Do you want to work toward financial freedom? Many people choose to incorporate real estate into that process so that they can live in part or in whole off their real estate income before they have to tap into their retirement accounts later on
• Do you have children whose education you want to support, now or in the future? You may want to send your kids to college without student loans, or provide them with training and opportunities and experiences if they're not going to go to college. 
• Do you want to pass down intergenerational wealth to your children someday? Real estate can create multi generational wealth for our kids and our grandkids that they can build on over time. 
• Do you want to ensure your assets are protected? Are you managing risks appropriately with insurance or legal structure?
• Do you want to optimize your real estate investments for taxes? There are all sorts of great benefits to being a real estate investor on your taxes, but you have to plan for many of them in advance.
• Do you have an estate plan? Does it include all the important documents, as well as a contingency plan for your real estate business and a plan for your digital life?
• Do your spending plan and mortgage strategy move you towards your goals without unnecessary risk?  Many successful real estate investors would rather buy a new rental than lease an expensive luxury car.
• Do you want to invest in a way that makes you feel excited for the future, instead of worrying about it? There is more to investing than the stock market. Do you have a comprehensive strategy for investing in your real estate, yourself, your business, and your retirement accounts?

If you found yourself saying ‘yes’ to any of these questions, you may benefit from working with a real estate-savvy financial planner as an experienced mentor to help you get there.

What is a real estate financial planner?

Whatever your goals are, working with a financial planner with specialized knowledge in your unique situation as a real estate investor can help you make the most of your rental properties while navigating through the complexities of legal and tax obligations.

Many investors choose to invest in real estate, for example, to allow for more flexibility and to position themselves for the many advantages and opportunities associated with real estate. Many choose real estate investments with the goal of supplementing their income, passing down properties to their children, and taking advantage of the many tax benefits of real estate investing. 

All of these benefits are great, but the catch is: you have to effectively plan for them, sometimes many years in advance.

A real estate financial planner can collaborate closely with your tax advisor, help you create a plan that accounts for all of your short-term and long-term goals, and adjust as needed. They can help you fit all of the pieces of your overall investment strategy together - including your real estate, your business, your employee benefits and retirement savings, your compensation, and other investments and benefits.

How do you choose the right financial planner?

When you go to hire any professional to help you, like a hair stylist or a personal physician, there are a lot of things you’d likely want to know about that person first. The same goes for choosing a financial planner.

You want to make sure they’re a good personality fit, for starters. You want to look forward to meeting with them and feel comfortable handing over your personal information to them.

It’s equally important that your financial planner understands your vision and has experience getting clients in similar situations to that end goal. As a real estate investor, you want a financial planner who understands that while most real estate is treated as “passive income” on the tax return, operationally, it’s important to treat your real estate holdings as a business.

Real estate financial planning credentials to look for

Looking at the credentials of a potential financial planner before beginning your engagement can help you get an understanding of their expertise before you even book a meeting. 

CERTIFIED FINANCIAL PLANNER®

We all know the ‘alphabet soup’ that tends to come after a financial professional’s name, but there are a few key designations that you may want to look for in a financial planner.

The first credential that you should look for — one that we believe prospective planners should have under all circumstances — is a CERTIFIED FINANCIAL PLANNER®, denoted as a CFP® after a planner’s name.

This credential tells you if your financial planner is actually a financial planner. A CERTIFIED FINANCIAL PLANNER® is a trained financial planning professional. They have gone through an educational curriculum, and they’ve sat for a board examination. They've had an ethics review, and they agree to adhere to certain ethics guidelines. 

And, notably, all CFP® professionals are fiduciaries in the financial planning engagement, meaning that they are legally obligated to work in your best interest when providing financial advice. However, note that only a Fee-Only CERTIFIED FINANCIAL PLANNER® is a fiduciary in all areas of serving clients with planning and investments.

CHARTERED FINANCIAL ANALYST®

Another key credential that many look for in a financial advisor is the Chartered Financial Analyst®, or CFA® Charter.

To attain the CFA® Charter, a financial planner must undergo a rigorous program to master investment analysis, wealth management, and financial strategy. If you’re looking for help with a securities portfolio or have a significant amount of alternative investments, a CFA® may be worth considering.

Other financial credentials to look for

Depending on your needs, there are plenty of credentials that signify a planner’s specialty. 

Some include:

• CLU® (Chartered Life Underwriter®): Ideal if you need guidance on life insurance strategies
• ChFC® (Chartered Financial Consultant®): Great for more complex estate and insurance planning scenarios that require advanced financial strategies
• CPA PFS™ (Certified Public Accountant with Personal Financial Specialist certification): Helpful if you need specialized guidance in tax planning from a personal finance perspective
• CIMA® (CERTIFIED INVESTMENT MANAGEMENT ANALYST®): A strong option if you’re looking for sophisticated investment advice, especially around portfolio construction or risk management.

Fee models for financial planners

When looking for the right financial planner for you, beyond making sure they have specialized experience that applies to your situation, you want to make sure you understand their fee structure. 

Fee-Only

The first typical fee structure that we want to break down is Fee-Only, like we use here at Real Life Planning. This structure means that your planner is paid directly by their clients. That means that they don’t charge any commissions, brokerage fees, or fees for selling financial products such as insurance, mutual funds, etc. 

This model aligns the interests of clients and planners, and is particularly beneficial if you’re looking for holistic financial planning.

Assets under management

Within the Fee-Only space, there are a few different business models. You might pay a fee based on what’s called the AUM model, or assets under management. This means, if you’re working with an RIA (Registered Investment Advisor), you may pay a percentage of the securities that are managed for you. Some real estate financial planners may work under this model.

fee-for-service

There is also what’s called a fee-for-service, which we use in our practice at Real Life Planning. This is more of a hybrid fee structure, where you pay an upfront planning fee and then an ongoing monthly fee. This fee structure is fairly common within the real estate financial planning space.

flat fee

For financial planners who are advice-only and don’t manage securities for their clients, there is also a flat-fee model. This simply means that they charge a flat fee for their services, whether annually, quarterly, hourly, etc. This model tends to be a good fit for those looking for a short-term engagement.

How to find a real estate investor financial planner

If you’re looking for a financial planner who has experience with real estate, there are a few options to help you hone your search.

First is the National Association of Personal Financial Advisors. Within their large database of personal financial advisors, you can search for those with real estate experience. You can also look at the planners through XY Planning Network to see which have expertise in real estate investing.

Another option is to look for planners who have been through the Real Estate Financial Coach course. This is a continuing education program, put together by professional real estate financial planners (including myself) to increase access to financial planning customized to real estate investors. 

All planners who have gone through this real estate coaching course are CFP® professionals, so you can have peace of mind that you’re working with a professional with the right mix of experience to help guide the real estate financial planning process.

Questions to ask a financial planner

When interviewing a prospective financial planner, there are a few questions that you may want to ask to make sure you’re working with someone who truly understands the complex needs of your situation as a real estate investor.

Some questions to keep in mind:

• Do they own investment real estate? Have they owned investment real estate in the past?
• Do they understand how 1031 exchanges work? Do they have experience with 1031 exchanges?
• Are they a hard money lender?
• What is their process like? Will they hand you a plan to implement on your own? Will they coach you through the process?
• Do they typically have short or long-term engagements?
• What resources do they have for referrals? Do they have a strong network?
• Do they have analysis tools that they can share with you to help you navigate deals?

There are no right or wrong answers here; it’s all about finding the financial planner whose services and expertise align with your needs.

Final Thoughts

There are plenty of things to think about when it comes to finding the right financial planner for you. It can be a long process, especially if you are doing your due diligence and interviewing many people, but the end result — feeling confident in the guidance you’re receiving — is well worth it.

This professional is likely going to be there for decades of your life, so you want to make sure that their personality and level of expertise are a good fit for you. You want to make sure you feel comfortable calling them before making decisions, and that you genuinely enjoy working with them.

There is no one financial planner that is the best fit for all real estate investors, but we hope that by having an understanding of the industry and knowing what to ask, you’re able to walk into each interview feeling empowered and ready to find the right financial planner for you.

If you’re looking for an experienced and dedicated real estate financial planner and want to see if Real Life Planning is the right fit for you, we’d love to have you book a discovery call with our team.

🏠 If you have a topic you'd like us to tackle on The Real Life Blog, we would love to hear from you! Please email us at info@realifeplanning.com.

This blog is for general financial education purposes. Information contained in this blog should not be construed as financial, tax, real estate, legal, or investment advice. For educational purposes, blog posts may contain links to other websites which are not under the control or and are not maintained by Real Life Planning. Real Life Planning has provided those links for your convenience but does not necessarily endorse all the material on those sites. Please consult your financial, real estate, legal, or tax advisor for advice specific to your situation.