Tax Deductions | Single Family Home vs Apartment

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It sounds great. Right? You’re getting 10 to 15 times more deductions of first year, but there’s a cost to this. And when I do it for my large apartment buildings, I’m usually paying five grand or so on that thing to do this, to extract it out. But that requires sending out a guy on expenses to travel out there, but that’s obviously not cost effective to spend $5,000 to get $20,000 of deductions.

At 25% tax bracket, that’s a break even. So that’s where this do it. Yourself. Cost segregation product comes in, but bill, let me put you on the spot here. Why would Lane’s spend $5,000? What else am I getting it by cost? Say that somebody’s spending 600 bucks and one of these things. Isn’t getting just sitting no eyes wide open what they’re going into.

Well, there’s a huge difference. And I think on your bigger deals, if you’re spending 5,000, you’re not getting a very good study. You need to spend more than 5,000. Are there usually between five and 10? So on an apartment complex, it might be 7,506, six to eight, depending again, on the engineering that’s done.

So on a full study, we look at it and I think anybody else would look at. What are the engineering hours it’s going to take to do the work? Cause we send somebody on site. We count everything. We qualify everything and we do all the asset detail. So in a full study, you get complete asset detail, meaning all your roof deal tale, all your HVAC detail, all your straight line detail.

As well as all your short life detail, carpeting, flooring, cabinets, everything, you’ve got some, and we give a hundred page report or back to you showing out all that detail. And we go into everything, electrical breakers, no one else gets the breakers. We need things that people don’t do. So we are deeper, but everybody goes in an engineer’s pretty deep and gets all the outlets and things.

So that’s what a full study is. It’s a lot of pages. It’s a lot of research. And a lot of documentation with the guy on site here. Oh, you always see the guy inside. Yeah. You always send a guy inside an engineer. We send our own engineers. Some people would send picture takers and interviewers and stuff, but somebody all wasn’t goes on site.

That’s pretty much what happens now with DIY it’s a non inspection product. So DIY means we’re modeling. So we’re going to air conservative. So if we would’ve gotten a 25% results by going on site, we might get. 19% by the DIY because you’re not sending somebody on site. If in fact, you’re audited, though, again, as I mentioned, we will go send somebody on site and we will do that a hundred page report for you.

But what you’re going to get with DIY is a model solution, which is what a lot of the people out there do models and residuals and sampling, and they add pictures and some engineering. But what you get is a one-page report that gives you your five, seven, 15 and 27 and a half year. And then some categories of generally what it would be, and then a receipt, and then your data inputs, because some people put the date wrong, we fix it for them.

We don’t charge afraid of that. You get a very streamlined report, but that’s all the CDA cares about CPR. 100 pages they want. Five seven, 15 and 27 and a half to put on your tax return and they’re done. So that’s what DIY does. So it gives you a lower number. It’s a lot less expensive. And so that’s why it’s good for the lower value properties where maybe you can’t justify a five or $10,000 study.

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