Are DIY cost segregations a good idea?

[Wiley Hood]

Recently, I've decided to do a cost segregation study on a new $490K property that I purchased this year.  I came across a firm (KBKG) that offers a $400 DIY cost study (paying for a membership).  I enter the information, and they generate the report.  It looks fairly simple.  To have a professional do it, it will be about $3,500.  Has anyone used the DIY tool, and are there risks?

[Michael Plaks]

@Wiley Hood

Yes, there're risks:

1. Risk that you will not enter good data, resulting in a possibly seriously wrong results

2. Risk that the IRS will challenge it, which is far more likely than with a full-service professional report

3. Risk that you will short yourself by not maximizing your cost seg potential

That said, when full-service cost seg is not economically sensible, DIY is a valid alternative