Key Takeaways
- Cost segregation accelerates depreciation by 3-4x in the first year, generating $100,000+ in additional deductions on a $3M building.
- Real Estate Professional Status enables using real estate losses against all income—potential savings of $50K-$200K+ per year for high-income earners.
- Four wealth-building mechanisms compound simultaneously: cash flow, appreciation, principal paydown, and tax benefits.
- Tax strategy should be integrated into acquisition decisions—after-tax return is the only return that matters.
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Test Your Knowledge
1.What is cost segregation and how does it benefit real estate investors?
2.What is the Real Estate Professional Status (REPS) tax benefit?
3.How do the four wealth-building mechanisms work simultaneously?