ISO: Cost Segregation Engineer/Accountant Cincinnati Ohio

[David Hildebrandt]

My partner, who is a dentist, and I acquired out first commercial multifamily back in February. I have been intrigued by the possibilities of cost segregation to increase depreciation and insure that we offset our income from the property. However, based on his job I don't think additional depreciation would be put to use offsetting his income (has no other passive investments.)

I am looking for a recommendation in the Cincinnati Ohio area of someone who could assist me with the analysis. Deal details below:

8 unit apt building + Adjacent 2 BR single family

$325K purchase price - $76K investment from my partner

Nets $2000 to $2400/month

Land Value $66K - Improvement Value $185K (county auditor's appraisal in Nov. '17)

[Bernard Reisz]

@Yonah Weiss I always appreciate your comprehensive and objective responses!

@David Hildebrandt It's great to hear that you're making a successful transition to full time real estate investing - kudos!

It's unfortunate that you had to cash out the retirement accounts to do so. For whatever it's worth, you are able to invest tax-advantaged retirement funds in real estate by using self-directed accounts. Per the Tax Code and IRS Guidelines IRAs/401(k)s can be invested in real estate. Vanguard, Fidelity, Schwab, et al, won't allow it, but properly set-up it is easily doable.

Regarding the tax impact of cashing out, the 20% withheld is a red herring. The actual tax liability is equal to: your marginal income tax rate + 10%. The 20% withheld is just a flat withholding rate imposed by the IRS; the actually tax liability can deviate substantially from that.

Depending how long ago the retirement accounts  were cashed out, there are mitigation strategies. (Based on the dates referenced in your posts, it seems that the window may have passed).

Continued success in your new full-time RE pursuit!