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Real Estate Deal Analysis & Advice

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Jay Ben
  • Vendor
  • Beverly Hills, CA
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Can I apply cost seg to my proforma?

Jay Ben
  • Vendor
  • Beverly Hills, CA
Posted May 31 2023, 06:54

does anybody apply cost seg depreciation in their financial model? Is there any way to do it without having an actual cost seg study done first or could I use a general assumption?

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Sean Haley
  • Real Estate Consultant
  • Dallas
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Sean Haley
  • Real Estate Consultant
  • Dallas
Replied May 31 2023, 16:07

personally, I do not model depreciation when considering an investment opportunity. Depreciation should not impact your valuation and only be relevant when filing taxes. Speaking broadly of course

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Jeff Nash
Pro Member
  • Accountant
  • McKinney, TX
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Jeff Nash
Pro Member
  • Accountant
  • McKinney, TX
Replied May 31 2023, 16:59

I am not sure it would be necessary to do that as @Sean Haley noted.  However, depending on the property/s depreciable value and how serious you might be about getting a cost seg done most of the larger reputable providers offer some preliminary analysis.  

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