“Where is” applies to something that is mobile….vehicles, boats, equipment, etc.

Or if the client is trying to sell a mixed use asset like a convenience store restaurant or motel, they will frequently try  to negotiate higher allocation to the land and building and a lower allocation to the FFE (fixtures and equipment) since only the land and building can be included in a 1031 exchange.When and if you finally sell without a 1031 exchange a higher land value can certainly be a huge tax mitigator!

Equipment costs $500 and the monthly service is $100.

Have about $35K in the equipment .

I'm bringing not only the properties to an investor but I'm also bringing years of experience, 100 plus thousand dollars worth of equipment, weeks to month of labor to the table. 

The cafe is about 900 sqft with all commercial equipment, booths, coffee machines, etc.

Our concern is his connection to previous seller, him having his daughter in another unit and his really low rent AND him having his maintenance equipment on the property.Thoughts or any additional questions you have before giving me your thoughts!

Once you talk to your tax person you should have a lot better idea as to what will work best for you.Some general tax write off ideas:Does your business need equipment that you can purchase and depreciate aggressivelyCan you do Stock loss harvesting (Sell a stock you have at the loss take that as a write off to help offset gains 3,000 cap I believe) Repairs/ upgrades to existing real estate you choose to use as a write off all in the current yearRetirement accounts (you may also be able to contribute on behalf of kids) 

In the optical industry they are referred to "labs" as opposed to factories as they categorized as medical equipment. 

If you intend to aim it at W2 Millennials, maybe a Chipotle would be a good fit.And about the restaurant, the menu drives the equipment selection, so when you say you have bought a restaurant, you have bought a menu.I say this because a restaurant is a unique business, and you might want to lease out the space to a successful operator looking to add a second (or more location).