Stories
Discover the real-life narratives that inspired us to embark on the journey of providing personal CFO services for our clients. This section unveils the experiences of our financial planning prospects and clients, showcasing the powerful impact of tailored guidance and strategic partnership.
Kristen and Dave Strategized to Improve Rental Property Success
Challenge
A pivotal aspect of the financial planning process revolves around understanding how clients' finances align with their retirement goals. During discussions about clients' rental properties, it became evident that they were keen on securing rental income not only for themselves but also for their daughter, taking legacy planning into consideration. Upon conducting a thorough analysis, we computed a one-year cash on cash return, revealing that, with minimal expenses, the return averaged a mere 1.5% across their four rental properties.
Solution
After a comprehensive review of the rental properties' performance, we identified a significant discrepancy between the below-market rents charged for a few properties and the insufficient market rent for one property, falling short of achieving the industry's average annual return of 3 to 5%. Delving deeper, we discovered that leases had not been renewed for several years, with month-to-month contracts in place. To address these concerns, we recommended rent increases for three of the four properties, along with implementing new lease language and renewing leases for all four properties. Moreover, our analysis pinpointed ideal markets to target for the acquisition of a fifth rental property, aimed at achieving the desired industry average of 3 to 5% annually. Clients’ response, “I highly recommend Darlene for her exceptional guidance and expertise. She has helped me optimize income and therefore, maximize returns on rental properties. Her overall awareness around my finances has given me peace of mind.” Dave and Kristen, Nederland, CO
Eliot Faced Unforeseen Risks in Setting Up Employee Contract
Challenge
Our client, in the process of establishing a private corporation and issuing stock ownership contracts to employees, encountered a complication when one employee hired an attorney to address conflicting interests arising from his poor health and his spouse's concerns. This discrepancy emerged due to a lack of understanding on our client's part regarding the implications of holding illiquid securities from a legacy perspective.
Solution
As part of our comprehensive services provided by our personal CFOs, we diligently review all contracts and agreements before their execution, not only for employees but also for investors, ensuring that all parties fully comprehend the contract's terms. Working closely with our client and their attorney, we ensure adequate provisions to address potential sales of illiquid securities stemming from private investments. This ensures a well-informed approach to stock ownership in the company and assists with client’s legacy planning. – Eliot, Aurora, CO
Kristen Faced an Unexpected Family Challenge
Challenge
Financial planning clients are tasked with implementing our recommendations. We find that our recommendations are typically not implemented by clients despite continuous discussions in follow up meetings. The unexpected happened to a family member of a client recently. At the time of this tragedy, the client realized the importance of setting up her family for success in the chance case the unexpected happened to her immediate family.
Solution
Not only does our client understand the importance of our recommendations in protecting not only their wealth but also her family, she is also proactively implementing our recommendations, ensuring a smooth transition for her immediate family if the unexpected ever occurs. Client’s response, “Now I understand why you were trying to protect our family. You are an angel.” – Kristen, Nederland, CO
Rob Dealt with a Costly Financial Oversight
Challenge
A prospect faced a daunting situation when he missed the renewal notice for his daughter's college grant. Failing to submit the necessary paperwork, he had to rush to the university, making a last-minute $30,000 payment for her tuition. The time lost in subsequently completing the paperwork to receive reimbursement added to his burden.
Solution
As a client of Hartmann CFO, we could have avoided the $30,000 payment by ensuring timely receipt and submission of paperwork for the college grant renewal. Our efficient notification system would have helped prevent such oversight. Additionally, regular monitoring of the client's financial obligations and proactive guidance could have mitigated the situation before it escalated to a significant financial burden. – Rob, Tustin, CA
Laura Did Not Need a Forensic Accountant to Unveil Truths
Challenge
Our client was interested in engaging a forensic accountant to investigate potential asset concealment by her spouse. Although still married at the year's end, both parties agreed to file separate tax returns for the current tax year. Shortly after the tax deadline, the spouse demanded our client to either amend her return and file jointly or face a hefty IRS payment.
Solution
In a mere five minutes of reviewing the spouse's tax return, we discovered a significant withdrawal from the spouse’s traditional IRA, despite explicit orders to maintain asset status until the divorce settlement. This finding ensured our client that she was not responsible for the hefty sum due to the IRS and raised concerns about the timing of the IRA payment, which is now under investigation. Our quick and thorough analysis spared the need for a forensic accountant and provided our client with invaluable guidance during this challenging time. – Laura, Charlotte, NC