Real Estate Tax Planning To Keep More Of Your Profit

Hey everybody, this is Toby with Global Integrity Finance. Today we're here with Jamie Finnin with Optimal Financial Group. We're going to talk to Jamie about who she is, what they do, and how Optimal can help you with financial planning, bookkeeping, and all that. So Jamie, welcome aboard.

Thank you.

How are you doing today?

Great.

So how are you enjoying down here in Houston?

Um, it's hot and humid. It's hot and humid, and we're inside a hotel.

Yes, but I love it here.

Good.

So tell us about Optimal. What do you guys do?

Optimal Financial Group is a full-scale CPA firm. We came about about 12 years ago. The company actually started in Virginia.

Yeah.

My ex is military.

Oh, okay.

So I'm actually from Virginia.

Really?

And then we got stationed in Houston. It's where he's from.

Yeah.

So we got stationed here. So when we moved here about 8 years ago, we opened an office here.

Nice.

So my partner, Charles Dombek, is off touring the world pretty much. I took over Optimal. Nice.

We have 12—

So you're running the show? Yes, so we have two offices. We're still in Virginia, and then we have the office in The Woodlands.

Okay.

We have about 12 employees that work for us, a couple CPAs. I'm actually an enrolled agent. We have bookkeepers, payroll specialists. We also do entity structuring, but kind of what sets us apart from other accounting firms is that we really focus on the tax planning and mitigation side of it rather than just compliance-based work.

So you're telling us how we can use this income or this asset and not get tax heavy on it?

Yes, to keep as much of our hard-earned money in our pocket, still pay our fair share to the government, right, without breaking the law, right? Exactly.

Awesome.

Um, and we do that mainly with entity structuring.

Okay.

You— how you have your LLC set up, how we have them taxed.

Now, do you guys set up LLCs?

We do.

Oh, really?

We do. Yes.

We have a new client who's a brand new flipper or investor, they don't have their LLC set up. Instead of sending them to an attorney that's going to charge thousands of dollars, we can funnel that over to you.

Yes. And we know how best to set it up from not only the liability standpoint but also from the tax standpoint, because we know the end goal, right? So it's So it's nice to have kind of both integrated.

Okay, outstanding. What does that timeframe normally take to have somebody set up an entity through you guys?

If it's a Texas-based entity, 24 to 48-hour turnaround.

Oh, really?

We do everything with getting it chartered with the state, getting the EIN from the IRS, doing your operating agreement. If you need to do an S election, we do all of that for you.

Okay, and cost?

We charge $1,036 plus the state filing fee, which is $308.

So you're looking at $1,500 turnkey. Okay, outstanding.

And then we help you with the taxes after the fact ongoing advice on how to, how to utilize the LLC properly.

So if I'm a new person that comes into this industry, want to get into fix and flip, I can come to you, get my LLC set up, then I go acquire some properties, maybe I do some flips. I'm gonna give you all my data, all my numbers, and you're gonna help me set up my tax return for that year.

We'll do the taxes, we'll help you if you have QuickBooks or another accounting software, we'll help you get everything set up. We'll show you how inventory works if you're doing a flip, right, and how you move that over to the P&L once, once the property's sold.

Okay. We are very well-versed in all types of real estate strategies.

I'm a real estate investor myself, and real estate is my passion.

Been there, done that.

Been there, done that. So we know everything from subject tos, wraps, owner financing, all of that.

Okay, and so from that standpoint, um, do you also offer a monthly bookkeeping service? We do.

So we are a full-scale CPA firm. We do everything from bookkeeping services, payroll. We can host the QuickBooks and do everything for you, or we can check it on a monthly or quarterly basis, just depending on the client's individual needs and wants. Our services for that, we charge $80 an hour.

And normally for a small guy, it's not gonna be too much because it doesn't have that much booking. But as you grow, yeah, and those services—

as you grow, you're getting a lot busier and you're out there making money, you don't have time to do the bookkeeping type services. So then it's time to delegate.

So I just take all my napkins from each week that I wrote all my sheets and just send them to you and you can enter them in there and do all that?

Yeah.

Nice. What else you guys do?

Um, a lot of it is just the entity structuring, the tax returns. We do obviously individuals, businesses, trusts if needed. Um, we have another company that works— that's kind of a sister company that works on wealth strategies. So getting you what— to what we call pre-retirement.

Okay, get to the point where you're building that.

Exactly.

Based on your target.

Exactly.

Where you want to be in 10, 15, 20 years.

We are trying to minimize that down to 5 to 10 years to show you where you can be. And a lot of that is by utilizing passive investments and things like that. So you kind of fill all the different buckets.

Yeah. So what brought you— so you said you've been working with Quest for about 7 years?

Yes.

All right, tell me how you work with Quest and how that, how that works.

Well, we have a lot of clients that come to Quest initially, or we refer to Quest if they have regular IRAs, and they say, well, you could be doing— do you know that you can do more than stocks, bonds, money markets?

Yeah.

You know, you can be utilizing these funds to invest in real estate or do loans to other investors. So not just the traditional. So we send a lot of our clients to Quest to get setup with their self-directed IRAs. Or Quest and I have a working relationship where if they have a client that has questions in terms of how they should be structured, or if they run into UBIT issues and they call us and we give the advice in terms of that. We also have tax strategies that we utilize, like my children. I pay them, right? And they have earned income, so they all have Roth IRAs at Quest, and they invest in real estate and have loans out.

Outstanding. So there's an in-depth relationship there. Yes, that you worked through over the last 7 years. Great. Um, so how does anybody get a hold of Optimal? What do we need to do to send to our clients and tell them how to get a hold of you, Jamie?

Um, we are on Facebook, so you can look up Optimal Financial, uh, there, send us a message. You can go to our website, www.optimalfinancialgroup.com.

Nice.

Um, you can always look me up, send me an email. Phone number is 281-288-9982.

Nice. You know, being around for as long as you have, which is what, 12, 15 years, where have you seen the industry come from, evolve to, and where are we headed?

In terms of real estate and investing, it's grown significantly. Obviously, you know, we're in Houston and Dallas, and it just doesn't stop, you know. It's branching out like crazy. When I first moved here, Katy didn't really exist, right?

And now it's a major metro in itself.

Yeah, and The Woodlands is now Conroe.

That's right.

Pretty much. So it's just growing drastically, and the different strategies evolve in terms of, you know, when I first started in the real estate, it was rentals or flips, and now you've got wholesaling and assignments and wraps and owner financing. So the strategies kind of evolved depending on the market. Okay. And I don't see that stopping.

I agree with you. And I mean, you know, I stepped in there to the— they've got the panel up there with some of them, and listening to them talk about how they go and get leads, how they go and how it's evolved from, you know, door knocking to flyers to now auto dialers to— I mean, they went in— there's somebody wrote a book, there's 200 ways to find a lead.

Well, that and social media just has—

social media has blown up.

It's a whole new game now. It's a whole new game.

Now you can reach anybody anywhere instantly and advertise who you are and what you do. Back when we started this in '94, it was commercials, TV ads, or radio ads. And now you have so many more platforms for that media that is helping us be able to get our message across, just like this video blog that gets everybody out there and exposed to everybody who's interested.

Right.

So what else do you see happening in our industry? Anything that we've missed?

Um, I think in terms of like putting the accounting side back into into it. Um, yeah, well, technology in general has made a huge impact on accounting because I have clients all over Texas and all over the US. You know, you're not just limited to people coming into the office anymore, right? Um, but I think that making sure that you're structured correctly from an entity standpoint— you know, everybody had everything in their personal names before, you know, and you subject yourself— yes, you subject yourself to a high level risk at that point. So making sure that you're, you're structured correctly from a liability standpoint so that you don't have issues later on, and then making sure that you're structured right from a tax standpoint so that, like I was talking about earlier, you have that, that wealth strategy that you're keeping more in your pocket, you're able to invest that, reinvest it back into it instead of giving it to the government. Right, right.

Great, outstanding. Well, thank you so much, Amy, for taking 5-10 minutes out of the booth time to come talk to us, share who you are, what you do, so we can help our audience know how to get a hold of you. Thank you.

Thank you so much.