But if you can allocate the funds to get a great coach who will not only educate you but MOTIVATE you over the entire first year of your REI business start-up, I think that's an excellent investment in your new real estate business.

This is to all broker/agents out there.If you stand for nothing you will fall for anything.Define your business and what you will and will not accept as a working business relationship.I see many residential agents desperate to get any business and they fall for anything.Some things close and they get money and some don't.The agents bad allocation of time and not getting paid for the time invested wipes out the profitable transactions.This is like an investor buying one good deal and then buying into a second bad deal.Now the 2 properties one making profit and one losing cancel each other out and you are no further along in your goals.Derek why don't you take a continuing education class on bpo's or apprasials,etc.??

Now allocation of dollars and budgets can be varied.

Mark I was just thinking with it being year end some sellers will dump properties really cheap for cash offers to clear their books.I do not want to mess with finance, loans, any of that stuff.I am closing commercial deals for my clients so my time is allocated there doing those kinds of things.I am thinking of it simply because I run across a lot of value add type stuff.

At this point, I'm more inclined to continue with syndications as my sole real estate allocation, but it's possible I eventually desire to be more active.

The court have said that expenses allocable to the common areas are not deductible (Anderson).2) You will have to find a reasonable way to depreciate based on # of room, or square footage of room that is rented. 3)Yes, utilities and those kind of other expenses can be allocated to rental activity based on the allocation percentage.

., You can allocate your proceeds in any way you want on the purchases. 

@Steve Vaughan  That is correct as I've run through that scenario with multiple tax advisors as well and its better to depreciate based on your claimed terms then to have the IRS back track and use their Land/Improvement value allocation to calculate your recapture on what you should have paid since they are probably going to calculate it to their favor rather than yours.A lot of accountants will use county tax records to allocate value to land or the actual improvement/building so determining this upfront can be of huge importance since residential is depreciated over 27.5 years or about 3.63% of Improvement value per year (1/27.5 = 3.63%).Sometimes using an actual appraisal may be better or worst.

Worst case, the entirety of the $23,400 contingency allocation is subtracted from the $42,000.00 leaving a balance of $18,600.00 in the account + the $5,000 if not utilized.I would still consider this a win given the balance in the account (approximately 10% of purchase price even if full budget was allocated) pl us equity pay-down and whatever appreciation the property sees.

What are the differences and when can you allocate some of your building depreciation to equipment...