How BUYING One Fourplex Can Save you $100,000 + In Taxes Year One thanks to Jobs Act and Tax Code

Video Closed Captioning:

good morning good afternoon good evening

folks michael’s uber one rental at a

time and we are back with our monday

guest mr david weiner we’re going to

talk about cost segregation and saving

you all some cash

how you doing david i’m doing great how

about you michael i’m doing well i got

to tell you you’ve quickly morphed into

a pretty popular guy on my channel you

know it’s it’s fun to see i like being a

popular guy you know

your channel’s become a favorite of mine

so uh

watching all kinds of your videos yeah

everybody i do put out a lot of videos

but it’s fun to do it’s fun to help

people and what you have brought to the

table is a education

right you have first brought the ability

to understand how you can legally use

the tax code to save uh money right to

get a tax deduction and actually save

cash you brought to us even advanced

things that were brought up by the jobs

act right because cost segregation has

always been there but it’s the special

sauce of cost segregation and bonus

depreciation that we have available for

one more year yes folks we’ve got the

special sauce for one more year full

discount then it kind of goes 80 60 40

20. we’ll talk about that later but

david i think you have a real life

example of a four-plex

that somebody’s putting some pretty good

money away

i do actually let me let me show you

what this looks like

um

if i can find it here okay go there you

go this is one that i just went over

with one of your folks just a little bit

ago awesome

and this is a four plex that he’s got

we determined that the building cost

minus the land was 563 thousand dollars

so let’s break that down for folks so

the reason you want to subtract the land

folks again is land is not depreciable

if you don’t know about that you can

talk to your accountant but yes you buy

a you buy a four plex for 700 grand you

must figure out the land value because

the only part that you can depreciate is

the building cost this is all

all up to snuff and again remember after

bringing david on the channel i brought

on a cpa uh to go through this so it’s

all in the video series so thank you

very much for that david so 563 is the

building cost well we assume

most of the time when a building is new

when it’s newly purchased they know what

the purchase price is but they haven’t

talked to their cpa yet and backed out

the land value and that sort of thing so

we just assume 20 of it is land it may

be more than that it may be less than

that depending on where you are in the

country and but you must ballpark

something yeah yeah so

taking 20 off of his purchase price plus

any renovations that he did we came up

with a cost basis that’s depreciable of

563 000. makes total sense he’s had it

for the entire year he acquired it in

january of 2021 so he’s had the property

for the entire year yeah and the reason

that is important folks is again is if

you bought it in say december you would

only get one month of depreciation for

2021 uh but here you’re going to get the

full 12 months and again

segregation study you would only get one

month yeah exactly that’s a good good

point good point as yes good point but

yeah this is these are all this is why

this is legal this is why it’s going to

work when you file your tax returns

because everything is matched to the

accounting standards so just want to

just want to highlight that for folks so

the typical way of depreciating a

building and it’s the easy way and

that’s why most it’s the lazy way i’m

sorry did i say that out loud

um

michael zuber says that it’s the lazy

way

i say it’s the typical way but to

depreciate it straight line you would

take 127 and a half

off of it every year so they’d get a

depreciation for 20 21 of 19 621 yeah

folks again this is all very easy if you

just want to take 563 divided by 27.5

you will get 1961.

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by doing a cost segregation study what

we do is

not every asset in the building has a 27

and a half year depreciable life but

it’s kind of easy to look at it as one

big thing and not have to worry about it

with a cost segregation study we

actually pick apart all the different

pieces and parts we determine what’s

five year depreciation what seven year

depreciation what’s 15 year depreciation

according to the tax code

and we break those apart

now because of as you said the tax codes

and tax cuts and jobs act in 2017 we’re

able to take all of that five seven and

15-year property 100

the first year

so rather than him taking 19

621 dollars of depreciation this year

by doing a cost segregation study he’s

going to take 128

256 of depreciation

off of your taxes non-cash deduction

non-cash expense yeah boy it’s it’s the

real estate investor’s best friend is

depreciation

even better yeah so

first off depreciation not in cash

expense again it’s often backed out if

you’re buying or using uh getting a loan

or something because it’s not cash right

it’s a legal tax deduction uh against

passive income buildings wear out and

things

wear out over time

um

the the bonus depreciation was actually

given to us

as a stimulus for people to invest in

the economy back in 2015 when things

were

pretty rough and you know um we were all

dealing with all the covet and

everything you know

i guess that was before covet but

to stimulate the economy they were

encouraging

people to invest back into the economy

so they said just take all the

depreciation now then you’ll have all

that extra cash well in this guy’s case

the extra cash works out to be

conservatively

an additional forty thousand two hundred

and ten dollars off of his taxes

cash

yeah and he had two buildings both of

which were about forty thousand dollars

off of his taxes yeah so let’s just walk

everybody through this right this again

if something is out there for the little

guy which i include myself in i’ve done

a duplex through your process david

you’ve helped me with those thank you

very much for that uh but but uh so a

couple of things first off doing it the

lazy way you save 19 grand

on a tax deduction doing it the way that

is 100 legal it’s going to be 128 so the

delta is 108 maybe 109 000

that 109 000 is a deduction which turns

into at a 37

tax bracket 40 000

in cash

so uh that is very very powerful but i

also want to talk here this is what the

big boys usually do right so if this

building cost instead of 563 was 5

million 630 grand

even better right and this is why you

see some very large apartment

syndicators talking about doing a 750

million dollar deal here in december uh

i’m gonna just do some really quick math

just because i want to

so there’s a big syndicator out there

that is raving about doing a 750 million

dollar deal let’s see if my calculation

even has enough zeros in it it does okay

so let’s times that by 0.8 because again

actually you know this times it by 0.75

because we got to back out land

right so that’s now

562 million dollars

uh what did we get here so of the value

128 five so it’s about 30

um

yeah well

this is about 20 okay so it’s about 20.

okay so the bonus is 20. so okay let’s

do that times

0.2

so that’s 112 million dollars in

depreciation which he will take in

december because it closed in december

now let’s see this guy makes it has to

pay taxes at point 37 percent because he

lives in a non

stack non-state tax times 0.37

so this individual just produced 41

million dollars in year one tax that’s

cash now what’s he going to do with that

41 million i don’t know he’s gonna buy a

private jet i think if you watch his

instagram another apartment company yeah

of course

yeah because the jet deductible as well

oh my god this stuff is amazing so this

is why folks have been big on

syndications big on apartments because

of bonus depreciation it’s making year

one profit look a lot better it’s

allowing people like that to hide their

education money and all of these legally

legally right now legal deductions this

isn’t free no the study costs money

and and people say well then all my

depreciation’s gone i won’t be able to

take any later yeah you will here’s what

it looks like exactly call up front

you’re going to take a little bit less

every year till the end of the property

life

but you’ll still get plenty of

depreciation the rest of the property

life

this study is going to cost him

and forty dollars there you go that’s

also tax deductible so his net cost is

going to be

3 175

in order to save

40 000 in cash talk about 10xing your

money that’s actually a 13x so you spend

three to get 40.

not bad

not a bad deal i think i think i would

do that

i would do that all day long i think i

do that twice

and then you might run into problems

with the irs but no two different

buildings two different buildings two

different buildings that would be good

that works um yeah and uh i i asked him

if if he

had an 80 000 tax burden to to take care

of this year and he said um

yeah probably yeah not anymore

not anymore he’s gonna have zero and he

said there might be a little bit less

than that and i said great then then

ten thousand left over you can carry it

on to next year and take that off of

your taxes next year that’s awesome man

well this is why that’s why you’re an

expert on the channels because you are

bringing something that the average the

little guy doesn’t know cost segregation

has been around for years the big boys

have used it it’s it’s now available

with firms like you for the little guy

bonus depreciation makes it extra extra

extra extra special because again if we

didn’t have bonus depreciation

you know 150 000 deal may not make sense

but because you can do the bonus

depreciation year one it makes all sense

of the world again if people want to

reach out to you david what is your

phone number to start the communication

okay so they can text me at 770-367-8091

or they can email me at david

david.weiner

w-i-e-n-e-r remember i before e accept

after c

at cost

segregationservices.com folks i

recommend texting him to get this

started because he’s very very busy one

more time david what’s the text number

770-367-8091 and i’ll send you a link to

schedule about a 10-15 minute phone call

with me will determine if this will work

for you

if it’s a good idea and i’ll get you the

free estimate so you’ll know exactly

you’ll have all of this where you’ll

know exactly what it’s going to do for

you and that’s actually a very good

point because this report that we are

looking at here this is the free

estimate you don’t spend any money you

spend a couple of minutes

looking at maybe it’s 30 minutes total

right 10 minutes up front 20 minutes

going through this with david then you

decide what you want to do up until this

point entirely free

absolutely and um

you know if when we go over this

together in a zoom call if they want to

bring their tax professional along the

call as well that’s perfectly fine i’m

going to ask them for their tax

professionals name and number because i

might have a few questions for them that

i need to ask and they definitely need

to know that we’re going to coordinate

with them provide them the necessary

forms to file they don’t have to fill it

out or do any of that kind of stuff and

provide them with the new depreciation

schedules it’s like falling off a log

it’s easy easy cool and worth a ton

very cool dave well thank you very much

for doing this every week this is

awesome folks again reach out to david

if you want to consider this for

something you purchased this year and

you can actually all the way back to

what 2017

actually i we can do any property that

you’ve well here’s here’s kind of the

guidelines that i use if the if the

value of the property not including the

land is 150 000 or above or if you don’t

know what that is if your purchase price

was 200 000 we’re good um and you could

have owned it for at least

you could have owned it for up to 15

years and a cost segregation study still

makes sense for you so get the estimate

we’ll find out exactly how much and then

you can decide i like that get the

estimate great advice thanks david thank

you michael

 

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