Brrrr, depreciation, & refi timeline strategy

[David Roberts]

Hi BP,

I'm in the process of purchasing with cash my first rental property and am planning to use the Brrrr method.  Some of the dots I am trying to connect for my analysis are how the refinance step impacts the depreciation of the property and if there is any strategy to the timing of that as we approach the end of year.

Question 1

I understand that my depreciation is calculated against the improved value of the property.  Once the refi process is finalized should I expect there to be parity between the improved value figure that the lender assigns and the improved value figure that my county auditor assigns?  ..and if not which figure is used for the depreciation formula come tax time?

Question 2

Assuming I decided not to use leverage on the equity of the property and continued to operate the rental and rehab with all cash - Is there a method to get the improved value of the property reappraised post rehab to enhance the depreciation opportunity?

Question 3

Is there benefit to sneaking in an appraisal before the end of the calendar year?  i.e. can the improved value of the property based on a reappraisal that occurred on 12/31 be used for depreciation purposes over the entire calendar year?

many thanks!

-David