Case Study · Buy-Side
Virtual CPA Practice Acquisition: Overcoming Licensing and Lease Obstacles
LCG sourced and managed the acquisition of a virtual CPA practice producing $600,000 in annual cash flow on a $1.4M purchase price. The buyer — a non-CPA entrepreneur with no tax background — faced two significant obstacles: the firm performed attest services requiring a CPA license, and the seller's office lease situation created an unexpected buyout issue. LCG navigated both, structured the deal with churn-based clawback protections, and identified growth opportunities that could push DSCR above 2.0x within 45 days of ownership.
The Opportunity
A Virtual Practice with Strong Recurring Revenue
The target was a virtual CPA practice producing $600,000 in annual cash flow on a $1.4M purchase price. The buyer was an entrepreneur who had previously owned a business in the cleaning and services industry — but had no CPA license and no tax background. LCG sourced and managed the deal on the buyer's behalf.
The Obstacles
Licensing Gaps and a Surprise Lease Issue
Two significant challenges emerged during the deal. First, the CPA practice performed attest services (audits, reviews, and compilations) which generally require a CPA license — and the buyer didn't have one. LCG strategically overcame this by finding a CPA to contract with to fulfill these services, providing a commission-based referral structure. Second, the seller originally didn't want to keep the lease on their office space (this was a virtual firm), but failed to inform LCG, the buyer, or the landlord — triggering a potential lease buyout issue. LCG worked with the seller, buyer, and brought in a real estate legal advisor to successfully exit the lease without incurring fees.
The Results
Immediate Growth Opportunities Identified Before Close
The deal was structured with a 10% buyer down payment ($140,000), 80% SBA financing, and a 10% seller note on a full 2-year standby with churn-related clawbacks — if client retention dipped below a certain threshold, the seller note would be reduced. Year 1 DSCR was over 1.9x against a bank requirement of 1.3x. Before closing, LCG identified three key growth levers with the buyer: a Google My Business account optimization, a website audit, and a client outreach campaign — projected to add 10–15% in new sales over the first 45 days of ownership, which would push DSCR above 2.0x. The buyer is projected to make approximately 200% cash-on-cash return over the first 12–14 months.
By the Numbers
Deal outcomes that speak for themselves.
From a stalled search to a closed deal and a growing business — in less time than most searchers spend reviewing CIMs.
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