Tax benefits ifits to Multiflamiy

[Jesse Phillips]

Been listening to Real Estate podcasts on BP. talking about tax benefits to investing in Multifamily. I have no experience in multifamily yet. Why are the tax benefits they speak of? Would like some explanation on that.

[Mike Dymski]

Cost segregation combined with bonus depreciation is huge.

A lot easier to 1031 one 100 unit property than 100 individual houses.

Apartment rehab often stays below the $2500 de minimis safe harbor per item (because apartment communities don't pay retail) - which means immediate deduction and no future depreciation recapture (i.e. an HVAC replacement may only cost $2400).

Some apartment rehab above $2500 per item can be immediately deducted if it does not meet the 20% "unit of property" rules (i.e. replace one HVAC system in a ten unit building).