Where to buy buildings with high building value?

Question

I'm looking specifically for a property that has high building value, so that I can claim a lot of bonus depreciation this year and generate a large paper loss in my rental property business this year.

My wife is a Real Estate Professional, so we plan to use these losses against our taxable income.

Right now I'm looking for something like a 4-plex around 1M Purchase Price, with a building value of 80% or higher. That way, I can generate a large amount of passive losses and offset some of my W2 income.

One big factor is that the 1M of real estate bought needs to at least be "Breakeven" - meaning it doesn't negatively cashflow.

Anyone in a similar position?

Scott Scoville · Answer

Hey Michael,

I'm a real estate agent and investor in Sacramento. I just recently completed a cost segregation study on one of my quadplexes. I'd be happy to share my experience. I plan on doing this again for myself and am working with a few of my clients on this.

Noah Laker · Answer

Hey Michael,

I'm a broker and investor here in Sacramento, CA. I manage over 100 properties (mostly STR / Airbnb).

I did the same thing last year: Bought two duplexes, total spend about $1.2m, then got cost segregations done for only a total of $800 (I'll show you how).

Sacramento is still rich with opportunity. If you guys are looking around here, I can provide a discounted commission by partnering with your wife, depending on the state in which she holds a license.