#229: Wes Mabry Cost Segregation Studies in RE and why they're a beautiful thing

Wesley Mabry is an experienced Cost Segregation Consultant with over 15 years of experience in the industry across a wide range of asset classes. Mr. Mabry founded 1245 Consulting in 2017 and services all of the United States. Wes has performed thousands of Cost Segregation Studies analyzing over 8 billion dollars of real estate improvements throughout the United States. His experience includes working closely with Accountants, CPAs, EAs, REITs, Corporations, Partnerships, and individual investors.

On this episode, Chris and Wes deep dive into cost seg and how they work, why different asset classes offer different depreciation possibilities and the implications of selling a property with accumulated depreciation through the life of ownership. They also discuss pending legislation and impacts on real estate/cost segs and much more.

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1:44 - What is a Cost Segregation Study?

3:08 - How is it different from straight-line depreciation?

4:35 - Is there any reason why someone shouldn’t do a Cost Seg?

6:33 - Can you do this on your own or do you need to hire a professional?

7:25 - Can this be done only on investment properties?

7:50 - Do the rules for Cost Segregation vary from state to state?

8:40 - what happens from the day I call you to get a Cost Seg to the day you send me the report? What then do I do with what you give me?

14:59 - An Industrial Deal example for Cost Segregation

18:14 - Are there any materials or components of a building that fall into gray areas?

20:30 - What are some asset types that receive the most benefit from Cost Seg?

24:34 - Do you want to do a Study before you do improvements to the property or after?

26:30 - What is a recapture tax?

30:57. - What do owners who are long-term holders do when their depreciable amortization schedule expires?

32:33 - Is there any ongoing legislation that people should be aware of?

34:15 - The importance of Land Value

37:44 - Is everything predicated on the year the Study is done?

38:59 - Can you do another Cost Seg to an office building that you convert to residential?