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Cost Segregation

Cost Segregation. Qualifying. Target Market. Targeting the correct market leads to: Efficient Time Management Higher close rates Increased confidence. CSSI Target Market. Commercial Property Owner/ Leasee with Build Out Very large and broad Not all qualify

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Cost Segregation

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  1. Cost Segregation Qualifying

  2. Target Market • Targeting the correct market leads to: • Efficient Time Management • Higher close rates • Increased confidence

  3. CSSI Target Market • Commercial Property Owner/Leasee with Build Out • Very large and broad • Not all qualify • Need to narrow focus to determine optimal target market

  4. Building Qualification • First Step • Determine if the building meets the qualifications of your optimal target market

  5. CSSI Target Market-Building • IRS states Cost Segregation can be applied to any property purchased or remodeled since 1986 • Buildings purchased/remodeled since 1986 are nearly fully depreciated • Properties purchased/remodeled more recently (last 10-15 years) will receive higher benefits

  6. CSSI Target Market-Building • Cost Segregation can be applied to all types of commercial properties • Unless you have a connection to larger, “skyscraper” type properties, you probably will never speak with the owner • However, CSSI can and has completed studies on these type of properties • Focus on smaller buildings ($10MM and under) • More likely to connect with owner

  7. CSSI Target Market-Building • Cost Basis • Needs to be at least $300,000 • Under $300,000 • May apply if multiple properties

  8. CSSI Target Market-Building • Types of Commercial Properties • Nearly all can benefit from cost segregation • Certain types benefit more than others • Medical/Office/Apartment/Retail – high end • Bare Warehouse – low end

  9. CSSI Target Market-Building • Buildings that will not qualify • Non commercial properties • Not for profit properties • Charitable organizations • Public properties • State owned properties

  10. Building Owner Qualification • Second Step • Determine if the building owner meets the qualifications of your optimal target market

  11. CSSI Target Market-Owner • All commercial property owners/leasehold improvement owners can apply cost segregation • True, but not all will benefit • Owner needs to be generating income • Paying taxes

  12. CSSI Target Market-Owner • Owners needs to hold property • At least 5 years after application • Cost Segregation accelerates depreciation, it does not increase overall depreciation expense • Based on time value of money • Need time for the savings to grow

  13. Locating Target Market • Start with personal relationships • Trust is already established • Visit businesses near you • Third party markets • CPA, Real Estate Broker, Banker • Conventions • Held for nearly every type of business • Ex. Hotel Owners Convention • Tax Assessor

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