Starting out, starting an LLC, cost segregation

[Priscilla Avery]

Newbie here and looking to start investing in Reno, NV or some other easily drivable area close to the Bay Area in CA that has properties not expensive as in the Bay Area. I cannot afford to start here.

BRRR is what I want to do. Also want to take advantage of the tax strategies in Tom Wheelright's book regarding doing cost segregation and taking depreciation on properties and items inside the property that can be a great tax benefit increasing overall cashflow even if your rents are cash flowing minimally.

Also wondering if I should create the business LLC as a first step in the state I will be investing in.  

Just posted this same question in the "starting out" category as well... Sorry for the duplicate

[Greg Scott]

Cost Segregation and LLC are two completely different topics.

Let's start with the easy one. There is no point in creating an LLC if you don't own any property or even have a property under contract. If you decide you need one, they can be created very quickly. Depending on your personal situation, using an LLC may or may not make sense. There are advantages and disadvantages. An attorney that knows your personal situation and isn't motivated by selling you an LLC can give you good advice.

Cost Segregation also may or may not make sense depending on the type of asset you have and your personal tax situation.  If your property is larger, or has a lot of cashflow, and you intend to hold for a while, and you can use the excess depreciation, I would absolutely do it.  If you plan on selling in just a couple years, it is a smaller asset, you have minimal cashflow or you are unable to use the excess depreciation, then it is just a waste of money.