All Forum Posts by: Michael Pease

@Sunny S. reach out to one of my business partners, Kyle Condon. He is at Ruhl and Ruhl. He's a licensed Realtor if you are looking for more properties in the area.

I have a couple of Air BnB units that are inaccessible at the moment due to the flooding. The units themselves are ok and we are very fortunate to be on the 2nd floor but the building is under water. 

Several of my management and accounting clients were greatly impacted as well. It's been pretty devastating but all in all, everyone was safe and the downtown will recover and be better than before!

@Joseph Woods I use QB online for a lot of real estate investors. You can use an excel file with advanced formulas to track activity as well while you are getting started. I've also recently stumbled onto Stessa but have not used it yet. I've had other real estate clients use Wave as well which I believe is a free solution.

I'd caution against making assumptions on a home before seeing the inside. What if the inside is completely torn out? Still think $84,900 would be a fair price? If the pictures on the listing are accurate it seems like it could be a great candidate for acquisition and possible refinance. I'd call that an average living area. Decent for rentals. Setup a walk through and you'll have a better idea of if it's priced fairly or not! 

@Suly B. I am very excited as a real estate investor and CPA for all the changes in the tax reform. I think platforms like Titan Echo, which I've used 5 or so times already, will greatly increase the ease of investors maximizing benefits in conjunction with CPAs and good agents. Looking forward to this year and beyond and working together on many more cost segregation projects!

Listened in, great information! Keep up the good work!

@Chris Dengel I have done 5 or 6 of these now for clients. Usually I'm doing them for business owners who also own their buildings so accelerating depreciation in the rental company, and raising rents on the S Corporation has been an extremely lucrative model. The major piece of this is the partial disposition regulations. Under prior regulations, if you bought a building and replaced the roof you'd be depreciating both the old and the new. Under new regulations, you can do a partial disposition. You identify the original purchase price of that roof as a percentage of the total acquisition cost. When you replace the roof, you dispose of the old roof, and start depreciating the new roof. This adds incredible tax savings. $15k for buildings under a million is a rip off. Engineering firms will charge you that. I did one recently for $6,000 that was a purchase price just under a million. The building owner generated great benefit, I made money for my firm, and the software company, Titan Echo, made some on their software. Seemed like a win across the board to me. Discuss with your CPA for sure! If this isn't something they offer it's a great add on service that is relatively straightforward, although time consuming, to learn and perform.

@Chris Dengel I have used it before. I'm a CPA so I've used it on behalf of clients of mine. It really makes sense on commercial properties with acquisition price in excess of $500,000 and some to major rehab having been done. The $600 version of their full software is basically going to give you historical averages allocated across the purchase price that you can use to reclassify. If you look into the audit techniques for cost segregation, there are several methods that can be used. The full blown engineering report is more likely to succeed in an audit, the historical average has less probability. None of their products guarantee the IRS will agree with the reclassification.

@Christopher Smith I agree the process is fairly straightforward but the risks of doing it yourself and having the IRS throw out your conclusion and taking on penalties and interest for under reporting income is something to factor into your cost decision. If you go the route of doing it yourself make sure you can easily justify every decision that was made as a starting point.

@Brandi K. The interest is most likely deductible as long as you are a small business and are not subject to new regulations under 163j (Gross receipts below $25 million would exclude you). The bank will most likely not send a 1098 for commercial loan interest. If it were a personal mortgage then they would be sending a 1098 breaking it out. You can still deduct the interest, just ask for a loan activity statement from the bank. I can't imagine any bank not cooperating with your request for that.

@Joe T. would be happy to connect anytime! I'll send you a message so we can connect offline!