In this episode of Uncontested Investing, we are wrapping up our tax and legal strategy series with a deep dive into cost segregation studies and how they can supercharge your depreciation, tax savings, and cash flow. Most investors focus on appreciation – but if you’re not using depreciation the right way, especially on larger commercial and multifamily assets, you’re probably leaving money on the table.
We break down what a cost segregation study actually is, which property types it makes sense for, and how engineers and specialized firms reclassify parts of your building into 5, 7, and 15-year property instead of 27.5 or 39 years. We talk through when to order a study, how it fits into your overall tax strategy, the real costs (often $10K–$30K), and the key risks like IRS scrutiny, recapture, and documentation.
If you’re holding commercial, multifamily, industrial, or larger rental properties and you want every legal advantage to reduce taxable income and improve ROI, this conversation will give you a clear, practical framework to talk to your CPA, attorney, and a qualified cost seg firm about your next move.
Key Talking Points of the Episode
00:00 Introduction
01:04 What is Cost Segregation?
02:21 The importance of cost segregation for investors
03:29 ROI mindset: this is about increasing returns
04:07 How cost segregation works: understanding depreciation
05:01 Planning around depreciation schedules
06:20 When is the best time to do a cost segregation study?
07:37 The costs of a cost segregation study you need to know
08:18 Balancing cost vs. benefit with a qualified firm
09:43 Understanding the risks and considerations of a cost segregation study
10:42 Why not all properties benefit from a cost segregation study
Quotables
“At the end of the day, the ROI is something that every investor’s looking for. They want the biggest ROI possible. So why not uncover every stone, and the cost segregation study is no different.”
“You’re not in this as a charity. You’re in this as a business. And let’s find the best way to get there.”
“Not all properties benefit equally… it’s not a one-to-one transaction where just because you made a certain amount of money on one that you’re going to make that every time you do a study.”
Links
RCN Capital
https://www.rcncapital.com/podcast
https://www.instagram.com/rcn_capital
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