Qualified Commercial Property
Can cost segregation help list and sell more commercial property? Yes!
Commercial property owners can employ cost segregation as a tool to help sell their properties. By offering the property with an engineered cost segregation study they do these things:
1) Give the buyer a MACRS-established property that…
Meets the new Repair & Maintenance/Capitalization Regulations
Accelerates depreciation which reduces income taxes & increases cash flow
2) Reduces real estate transfer taxes
Section 1245 property assessed as FF&E which has lower valuation
Escrow requirement is correspondingly reduced which positively affects monthly operating expenses (FF&E…Furniture, Fixtures & Equipment)
3) Reduces Property & Casualty premiums (depending upon the jurisdiction)
Again, Section 1245 property is assessed like FF&E which has a lower premium
Again, reducing escrow requirements
4) Debt-service coverage is increased allowing for a negotiated reduction in mortgage rate
This happens from the reduced income tax burden in the critical first five years of ownership
In addition to the reduction in operating expenses from real estate taxes and insurance
5) These reasons allow the “seller” to advertise their property with “cash” at closing which differentiates their property from the competition
Yes, the seller pays our fixed fee but they are buying huge benefits at pennies on the dollar
And yes, our fee is fully expensable and can be rolled into the price of the property
6) All of these areas addressed is sufficient to engage cost segregation
Multi-family Property
Cost segregation is an increasingly used tool to mitigate income taxes. Now, with the advent of the finalized “repair” regulations, cost segregation is virtually required by the IRS. In fact, how else can a commercial property meet the IRS regulations without it?
For the commercial real estate professional, cost segregation is “the” way to differentiate yourself from competition. You will list more property and sell more property. How could you not?
For more details, contact us at…
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972-865-9050 Office
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