Financial Freedom with Real Estate Investing

Real estate has always had tax advantages, but in recent years, the deal got even sweeter for multifamily investors. 

So, how do we write off depreciation? What is a cost segregation study and how can it save us even more? 

Heidi Henderson serves as Executive Vice President at Engineered Tax Services, the nation’s leading tax credit and incentives firm. As an experienced tax consultant and real estate investor herself, Heidi specializes in the application of tax efficiencies to multifamily investments.

On this episode of the podcast, Heidi joins cohost Garrett Lynch and me to share the unique tax advantages of real estate and explain why the US government incentivizes multifamily investors.

Heidi describes how to take advantage of BONUS depreciation (provided for by the 2017 Tax Cuts and Jobs Act) by conducting a detailed cost segregation analysis.

Listen in for Heidi’s insight on determining the ROI of a cost seg study and find out how YOU can save tens of thousands of dollars with the magic of accelerated depreciation!

Key Takeaways 

The unique tax advantages of real estate

  • Depreciate value of real estate over 27½ years
  • Bonus depreciation through ‘cost seg’ analysis

Why the government incentivizes real estate investors

  • Consumerism drives economy
  • Encourages improvements to infrastructure

What depreciation is and how it works

  • Deducting cost of asset over its ‘useful life’
  • Reduces taxable income for investor

 Why you should claim bonus depreciation right away

  • Must be done year property is purchased
  • Inventory breakdown helps plan renovations

How to take advantage of accelerated depreciation

  • Conduct cost segregation study
  • Itemize deductions (e.g.: carpet, windows, etc.)

What to look for in a company that does cost seg

  • Can vary from 2 to 150 pages
  • Ask for copy of redacted study to compare

How to determine your ROI on a cost seg analysis

  • Based on taxable income, percentage of tax paid
  • Subtract cost of analysis

The limitations on taxable income for passive investors

  • Depreciation offsets real estate income only
  • Does not offset income from W-2 job

Why we should cash in on bonus depreciation now

  • TCJA passed 100% bonus depreciation
  • Drops to 80% in 2023, 60% in 2024

Connect with Heidi Henderson

Engineered Tax Services 

Heidi on LinkedIn 


Call (801) 564-4464


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Podcast Show Notes

Direct download: Financial_Freedom_with_Real_Estate_Investing_EP307.mp3
Category:Commercial Real Estate -- posted at: 1:00am EST