All Forum Posts by: Clint Harris

I reached out to my accountant about doing a cost segregation study in order to utilized the accelerated depreciation, and he said that it’s usually very cost prohibitive and is hard to justify unless you have a very high income. I have a high income producing beach rental duplex that was purchased after the accelerated depreciation start date in 2017, I have a high paying W2 job in medical sales, and my wife is a real estate professional, with 1099 income, so it seems ideal to write a lot of this off. He is under the impression that a cost segregation study is extremely expensive. Does anyone have any knowledge about this or recommendations on who to use for a cost segregation study? Thanks!

@Michael Gessner the building department confirmed that we can only renovate up to 49% of the tax assessment on the property, or else we need to string the project along greater than 12 months so that it can be spread over 2 years instead of 1, which is stupid and impossible. That would limit us to a Reno budget of 170k, and the project is 250k. You can’t exactly piecemeal a project when adding a floor and new roof.

@Michael Gessner as stated, we’ve already met with a structural engineer and had an assessment done. The property is on a slab outside of the flood zone, and isn’t a candidate for lifting, which was confirmed by the structural engineer.

@Uriah D.

No bad, but likely impossible. The new code changed all the framing requirements and spans, so it would literally mean tearing the entire property down to studs, and then rebuilding the whole thing. It’s a cash cow as a short term rental property, I’m inclined to leave it, but my wife wants to renovate and improve it and make it a passion project

@Greg Dickerson

Thanks Greg!

My wife and I are interested in completely remodeling one of our beach duplexes that we use for short term rentals. Specifically, we want to go up another floor, new covered porches, new hardy plank, basically a full remodel. Already met with the structural engineer, and interviewing builders now. Here’s the question, The property was built as an upstairs/downstairs duplex in the 80s, each unit is 3/2, if I increase the value of the property over 50% of the replacement value, am I required to bring everything in the property up to code? Would that mean all framing, etc that has changed since then? We purchased for 370k, put 20-30k into it, currently worth 450k. If we DO, then I’m assuming that would be based on the replacement cost of the structure

Thanks Aaron, appreciate the intelligent analysis!

Just had a call from a friend and future partner who is under contract to sell a small boutique hotel and a triplex. After taxes he’ll be sitting on 1 mm in cash, and there is probably 6 months before the next deal that we take on. What do you do with a million in cash for 6 months? Stock market is obviously out.  Unfortunately there are not very good options for short term cash. Interest rates were cut in light of coronavirus by 75%. Keeping money in cash is probably the safest thing you can do only because investing in bonds right now is a complete crapshoot. CDs are the safest option, but there has to be a better option.  Short term hard money lending?? Maybe for a couple hundred, but 1 mm is too much to underwrite.  What would you do?

Sure, send me a DM.  I have a copy at my office and I’ll be back there tomorrow or Monday