All Forum Posts by: Joe Hamner

Hi folks, any owners/operators with communities in Virginia care to share their lot lease? Surprisingly, the VAMMHA doesn't have a template and I like to use something that has already been vetted by a VA attorney. Thanks!

Hi MHP Investors! If anyone is interested in going in on the 2-ticket package for the October boot camp in Nashville, please PM me.

@Yonah Weiss, in addition to providing confirmation on one of the points around the original question, thanks for passing along the great article by @Brandon Hall.  Very informative!

@Yonah Weiss and @James Davis - thank you.  Sounds like the cost segregation approach is the way to go.

@Patrick McKenna - thanks for the tip on the JL podcast; I'll definitely check that out.  

Hi folks,

I'm close to getting my first MHP under contract and am trying to understand whether my project will have some of the tax advantages that park owners enjoy due to the 15  yr depreciation schedule on certain infrastructure assets.

Here's the issue; I'm buying the park for the current assessed land tax value and because it's a TOH only park with no buildings, the tax assessment doesn't reflect any land improvements (that would otherwise provide a starting point for determining a reasonable allocation between what's depreciable and what isn't (ie., the land).  Obviously there is great inherent value in the infrastructure (paved roads, upgraded septic systems, water/sewer lines, etc.) so how is a reasonable depreciable basis calculated from the outset?

If my purchase price is the same as the assessed land value, will I have any depreciable basis going into the project in the eyes of the IRS? I understand that future capital improvements would be depreciable but if none of the value of the existing infrastructure can be applied towards the basis, it obviously reduces my after-tax returns.

If the answer to question above is no, can I effectively create a defensible basis by getting a cost segregation done that breaks out the true value of the infrastructure or, would the appraisal suffice since the appraiser would presumably provide a breakout of the infrastructure value? 

For the purpose of the questions, if the purchase price of the park is $1M and current assessed land value is $1M (despite the fact we know many assessments are artificially high the for tax gains of the municipality and do not reflect the true market value), I guess I'm essentially asking if / how I create a case to lower the value of the land and apportion the balance to "infrastructure", and thus gain a depreciable basis from day one (or am I dreaming)? 

Thanks!

Hi, I'm picking up on this thread about MHP depreciation.  

I'm close to getting my first MHP under contract and am trying to understand whether my project has any depreciation advantages or not.  Assumptions:

- This park is 100% TOHs so no mobile homes to depreciate

-  No clubhouse, other amenities, or real property to depreciate (the only structure is a small pump building)

- As far as existing infrastructure, the park is on well and septic (multiple systems), sewer/water lines, paved roads, electric to all pads--all that have considerable value when considering replacement costs

I've negotiated a below FMV purchase price directly with the current owner for the amount of the current assessed land tax value (and the tax assessment doesn't reflect any assessed land improvements (buildings) since they aren't any).

Here are the main questions with regard to depreciation:

1)  If my purchase price is the same as the assessed land value, will I have any depreciable basis going into the project in the eyes of the IRS?  I understand that future capital improvements would be depreciable but if none of the value of the existing infrastructure can be applied towards the basis, it obviously changes my after-tax returns significantly. 

2)  If the answer to question 1 is no, can I effectively create a defensible basis by getting a cost segregation done that breaks out the true value of the infrastructure or, would the appraisal suffice since the appraiser would presumably provide a breakout of the infrastructure value?  

3) Could I improve my defense against a future IRS audit by including an allocation of the purchase price to land vs infrastructure (eg., 50/50 ratio) in the purchase sales agreement of the park, or does the fact the county land assessment equal the purchase price supersede that in the eyes of the IRS? 

Thanks,
Joe