Think of them as productized cost seg - same IRS-defensible methodology and audit support as the big firms, but delivered through software with standardized processes.For residential properties under $500k, this middle ground often makes the most sense.

You may wish you believe you generate "good estimates" but by your description you don't have a methodology in place to do that.

As far as the question regarding the valuation methodology for the practice... typically practices are valued based on a percent of previous years' collections, a multiple of EBITDA or a combo of both. 

Quote from @Dana Yobst: Quote from @Julio Gonzalez: @Dana Yobst While it may seem like a simple concept, it's actually a very complex process that requires significant documentation as well as specific methodologies.

I completely agree with your distinction, and it’s an important one for readers to understand.To clarify, my use of cost segregation in this context referred to the underlying tax principle and methodology of separating tangible personal property from the structural improvement bucket and not suggesting that Clark needs to commission a formal, engineered cost segregation study for a $60k remodel where the appliance costs are already known.As you rightly pointed out, if the taxpayer or their CPA isolates those $6k appliance costs directly from the receipts and places them on a 5-year MACRS schedule, they are effectively executing that segregation of costs themselves.

There is a difference in 'engineering-based' and "fully engineered and accounted" methodology in the asset detail and the benefits.

The methodology is rules-based and consistent, which is what matters for audit defense.

Different firms use different methodologies, and some are more aggressive than others.

Each property is so different that that is why a good engineering based study with on-site property review is the IRS' preferred methodology and keeps you out of IRS audit territory. 

If you're still learning and this is your first flip, or if your ARV will not pass muster according to USPAP appraisal methodology, don't waste your time trying to work with Lima One, just take the 12% and 3 points from a bottom feeder HML.