Cost Segregation Study on a House Hack

[Edward Shafidiya]

Question: Would it be worth to do Cost Segregation study on a house hack? Here’s my thinking: I want to do 203k loan with 3.5% down, buy a Multifamily in the a good area in NJ that needs work and Cost Seg. Would it be worth it use some of your cash on a Cost Segregation instead of putting more money down for the down payment?

[Yonah Weiss]

Very interesting question @Edward Shafidiya. First of all the depreciation does not apply to your personal residence, so if you have more than one unit, the amount that you can depreciate will exclude the value of the unit you live in.

You will have to figure out if it's worth spending the money on a study vs. how much tax benefit there will actually be, and if you can even use that benefit. Sometimes the question depends more on you as the tax payer, than the property itself.

So some more information will help us give more clarity into answering your question.

-What is the purchase price?

-How many units?

-Do you qualify as a real estate professional?