Articles by Patrick O Connor on ArticleSnatch.com

Due Diligence

Wed, 10 Feb 2010 00:15:50 -0500

Due diligence is an essential step in real estate investment. After selecting the property type and geographic location, the investor needs to ascertain he has accurate information regarding the physical asset, financial performance, tenant base and future prospects for the subject property. Due diligence helps the investor accomplish those tasks. Due diligence can provide in-depth data and insights for these areas and mitigate the risk of a real estate investment. The costs associated with due diligence are minimal compared to the costs of making an imprudent investment decision. In addition to investors avoiding unfavorable investments, due diligence can: Enable investors to quickly pass on potential investments which do not merit a complete analysis; Save money and reduce the time an investor spends evaluating a possible investment by more quickly declining an investment which does not fit the investor’s criteria or that is not consistent with what was presented; and Provide the investor with a better understanding of the benefits, costs, risks and opportunities related to an investment. The financial costs and time expended by the investor and the opportunity cost (of not pursuing other more attractive investments) related to fully analyzing a real estate investment are substantial. **End Summary** Topics: due diligence]]> cost segregation]]> real estate appraisal]]> prop]]>]]> About the Author: ]]> The appraisal division of OâConnor & Associates is a national provider of commercial real estate appraisal services including cost segregation studies, due diligence, insurance valuations, feasibility studies, estate taxes, lease abstraction and HUD map market studies. http://www.protest-denton-county-property-taxes-appraisals.com/Article/estatetaxes.cfm http://www.protest-denton-county-property-taxes-appraisals.com/Article/lease_abstraction.cfm

Commercial Real Estate Appraisal Sales Comparison Approach

Tue, 02 Feb 2010 06:16:25 -0500

The sales comparison approach is the most intuitive and best understood of the three approaches to value. Home buyers, companies renting office space and real estate investors all utilize this approach. Comparable sales are often referred to as comps and rental comparables are often referred to as rent comps. Performing the sales comparison approach includes selecting sales comparables and making appropriate adjustments. Selecting comparables if often the more challenging step. There are minor nuances which are not obvious. The process of accurately making adjustments requires research, skill and experience. Selecting comparable sales is the most critical aspect of the sales comparison approach. Truly comparable sales must be utilized for value indication to be meaningful and impact the final result for less than sales which are not comparable. Appraisers usually focus on land use (type of property) location, size, age and date of sale when selecting comparable sales. Selecting sales comparables involves selecting which feature (location, size, age and date of sale) are most meaningful. Since real estate is not fungible and sales occur periodically, comparables are never identical to the subject property. Comparable sales should be the same land use as the subject property in virtually all cases. **End Summary** Topics: cost segregation]]> real estate appraisal]]> property tax reduction]]> real estate appraisal]]> property tax reduction]]> commercial real estate services]]> LIHTC]]>]]> About the Author: ]]> The appraisal division of OâConnor & Associates is a national provider of commercial real estate appraisal services including insurance valuation, real estate appraisals, cost segregation studies, due diligence, feasibility studies, financial modeling, gift tax valuations, highest and best use analyses, casualty loss valuations and HUD map market studies. http://www.protest-waller-county-property-taxes-appraisals.com/Articles/insurance_valuation.cfm

Houston Commercial Comparable Sales

Fri, 22 Jan 2010 02:15:18 -0500

Houston commercial comparable sales data is readily available from oconnorcomps.com. Real estate appraisers, investors, brokers and other real estate professionals use commercial comparable sales data to make critical decisions. Accurate and timely commercial comparable sales data is available to assist making decisions regarding Houston area commercial real estate. Oconnorcomps.com offers the following volume of commercial comparable sales data for Houston and Texas: Commercial sales in Houston Land sales in Houston Commercial sales in Texas Land sales in Texas Commercial comparable sales data is available for the following Texas cities: Houston, Dallas, Fort Worth, Austin, San Antonio, Beaumont, El Paso, Brownsville, Amarillo, Victoria, Tyler, Longview, Midland, Odessa, Texarkana and many additional cities. Commercial comparable sales data available from oconnorcomps. **End Summary** Topics: Houston Commercial Comparable Sales]]> Dallas Fort Worth Commercial Comparable Sales]]> Austin Commercial Comparable Sales and Commercial land sales.]]>]]> About the Author: ]]> The Austin commercial comparable sales data you need is available at OConnorComps. To prepare a commercial comparable sales approach, try OConnorComps for abundant reasonably priced data. http://www.oconnorcomps.com/whatnews.aspx?pgType=Commercial%20Comparable%20Sales%20-%20Austin.htm http://www.oconnorcomps.com/whatnews.aspx?pgType=Commercial%20Comparable%20Sales%20Approach.htm

Cost Segregation - Tax Deductions by Laurence J. Peter

Wed, 13 Jan 2010 01:41:09 -0500

"Few of us ever test our powers of deduction, except when filling out an income tax form” - Laurence J. Peter, U.S. Educator By understanding business tax deductions, business owners may enjoy personal benefits from business expenditures – entertaining clients or donating to charitable organizations, - if they follow the myriad tax rules. Only half of business entertainment expenses can be deducted. Eligible business entertainment consists of taking a client to a ball game, a concert, or dinner at a good restaurant. However, if you are audited, there must some verification that the entertainment expense was related to business. You must therefore file all bills carefully, mentioning the purpose of the bash against each bill. For a charitable event, only a portion of the ticket value is deductible. The portion that is NOT deductible is the value of the goods or services that you receive (e.g. dinner, entertainment, etc.). The rest is deductible. For example, if you pay $150 for an event, and the benefits received are worth $60, the tax-deductible amount is $90. The charity hosting the event will be able to identify the exact value of the benefits for each event. **End Summary** Topics: Cost segregation]]> federal tax reduction]]> tax reduction]]> reducing income tax]]> appealing property tax]]> arcane tax tip and tax deduction.]]>]]> About the Author: ]]> OâConnor & Associates is a national provider of commercial real estate consulting services including cost segregation, due diligence, federal tax reduction, renovation upgrading cost analyses, tax return review and apartment inspections. http://www.poconnor.com/cost_segregation.asp http://www.industrial-space-rent.com/Federal_Tax_Reduction/index.cfm

Texas Business Personal Property Rendition and Taxation

Wed, 06 Jan 2010 00:43:34 -0500

The Texas Property Tax Code for many years had required owners of business personal property (BPP) to annually render those assets used in a business. Rendering is summarizing to the central appraisal district the ownership and value of the assets. Historically, however, over half of all owners of business personal property have not rendered. The Texas law was unusual in that while rendition was mandatory, there was no penalty for not rendering. Therefore, many property owners did not render because it was not material, was not convenient or would dramatically increase their tax liability. For many small business owners, the value of the personal property and the associated property taxes are modest and not a material issue for the business. Chief appraisers at central appraisal districts and tax entities have long been concerned that a material amount of business personal property is not being taxed. There is a reasonable concern that if business personal property owners are not being taxed equitably with real property owners, the burden of taxation is shifted from owners of personal property to owners of real property. Impetus for Change Several factors combined to make business personal property rendition a hot topic. In Robinson vs. **End Summary** Topics: Property tax reduction]]> appealing property tax]]> reducing inc]]>]]> About the Author: ]]> Reduce your Austin property tax by contacting Oconnor & associates. Oconnor & associates can represent you at the Williamson central appraisal district. http://www.protest-travis-county-property-taxes-appraisals.com/Property_Tax/index.cfm http://www.protest-travis-county-property-taxes-appraisals.com/Articles/Williamson_Central_Appraisal_District.cfm

Commercial Comparable sales -- Sales Comparison Approach

Fri, 18 Dec 2009 04:01:57 -0500

Commercial comparable sales are the building block of the sales comparison approach. The quality and quantity of comparable sales data impacts the reliability of the sales comparison approach. Selecting comparable sales that are most similar to the subject property requires analysis and judgment. The factors given greatest consideration when selecting comparable sales include: location, date of sale and similarity of property. Depending on the quantity and quality of comparable sales data available, it is sometimes necessary to use sales that occurred three or five years prior to the effective date of valuation to obtain comparable sales that are meaningful. In most cases in urban areas, it is possible to obtain a reasonable number of comparable sales that are similar with regard to location, effective date of the valuation and the subject property. Factors affecting the location of comparable sales can include the income characteristics, distance from the subject property and the type of location. In some cases for commercial properties, a property can be only one-half mile away from the subject property but have completely different income characteristics. **End Summary** Topics: Houston Commercial Comparable Sales]]> Dallas Fort Worth]]>]]> About the Author: ]]> Need sales data to prepare a BPO for commercial property. Get the Dallas Fort Worth commercial comparable sales you need in one place â OConnorComps. To prepare a commercial comparable sales matched pair analysis, try OConnorComps for abundant reasonably priced data. http://www.oconnorcomps.com/whatnews.aspx?pgType=Commercial%20Comparable%20Sales%20-%20Dallas%20Fort%20Worth.htm http://www.oconnorcomps.com/whatnews.aspx?pgType=Commercial%20Comparable%20Sales%20Matched.htm

Appeal Your Property Taxes on Market Value and Unequal Appraisal

Thu, 10 Dec 2009 05:04:52 -0500

The first step to annually appealing your property taxes is to send a written notice to the appraisal review board (ARB) for the county in which your home is located. Even if you have not received a notice of assessed value from the appraisal district, file a notice of appeal by May 31st. You can file a notice of appeal by utilizing the Comptroller's form or by sending a letter to the ARB. The letter to the ARB simply needs to identify the property being appealed and the basis for your appeal. You should always appeal on both market value and unequal appraisal. Comparable sales are the cornerstone of a market value appeal for a home. Sources of comparable sales data can be found in the House Bill 201 package obtained from the appraisal district and MLS sites. To develop a market value appeal consider the following factors: New-home discounts - Recently purchased homes in subdivisions where builders are active, or near subdivisions where builders are still active, often sell for 5% to 15% less than their initial purchase price. Researching data for recently sold homes sold by the initial owner (versus the builder) will document this discount. **End Summary** Topics: Property tax reduction]]> appealing property tax.]]>]]> About the Author: ]]> Reduce your property tax by contacting Oconnor & associates. Oconnor & associates can represent you at the industrial space rent. http://www.industrial-space-rent.com/Property_Tax/index.cfm http://www.industrial-space-rent.com/index.cfm

Cost Segregation - Tax Deductions (The tax code allows deductions from gross income)

Wed, 02 Dec 2009 01:09:40 -0500

By understanding business tax deductions, business owners may enjoy personal benefits from business expenditures - a nice car to drive, a combination business trip/vacation, retirement savings plan - if they follow the myriad tax rules. The tax code allows deductions from gross income, which reduce income taxes. Increasing tax deductions reduces taxable income and income taxes. Therefore, knowing how to maximize your deductible business expenses enables you to lower taxes. According to the IRS, trade or business expenses must be ordinary and necessary to be considered a tax deduction. Although the tax code does not specifically define “ordinary” and “necessary” tax deductions, these types of expenses are specified in various IRS publications and regulations. Some of the tax deductions business owners can claim fall under categories such as charitable contributions/donation deductions, medical and dental deductions, moving expense deductions, deducting job costs, travel and entertainment expense deductions, casualty and theft losses, depreciation and involuntary conversion deductions. Even after the fiscal year ends, and business owners of improved commercial real estate are still seeking tax deduction opportunities, one popular option is to order a cost segregation study (CSS). **End Summary** Topics: Cost segregation]]> federal tax reduction]]> tax reduction.]]>]]> About the Author: ]]> OâConnor & Associates is a national provider of commercial real estate consulting services including taxes, federal tax reduction, cost segregation studies, due diligence, renovation upgrading cost analyses, tax return review and apartment inspections. http://www.protest-williamson-county-property-taxes-appraisals.com/Articles/taxes.cfm http://www.protest-williamson-county-property-taxes-appraisals.com/Federal_Tax_Reduction/index.cfm

Tax Reduction Affected by Cost Segregation

Tue, 24 Nov 2009 01:05:47 -0500

Tax reduction is just one of the benefits of cost segregation. Many real estate owners and tax preparers believe cost segregation simply defers payment of taxes. While they recognize it effectively generates an interest-free loan from the government, they do not understand it also provides tax reductions in most cases. For most real estate owners (corporations are the exception) income is characterized as either ordinary income or capital gains income. It is not intuitive, but cost segregation changes the character of income from ordinary income to capital gains income providing tax reductions of up to 20%. This occurs because the additional depreciation is a tax deduction that reduces ordinary income. When the property is sold, it is recognized as capital gains income. Having more tax deductions increases tax reduction. Since a portion of the cost basis is allocated to short-life improvements, some owners and tax preparers express concern that the depreciation will be recaptured when the property is sold (at a tax rate of 25-35%). When a property is sold, the owner and the tax preparer typically collectively review the sales price and depreciation schedule to allocate the sales price between land, short life property, long life property, and profit. **End Summary** Topics: Cost segregation]]> federal tax reduction]]> tax reduction.]]>]]> About the Author: ]]> OâConnor & Associates is a national provider of commercial real estate consulting services including cost segregation studies, tax reduction, due diligence, renovation upgrading cost analyses, Dallas federal tax reduction, tax return review and apartment inspections. http://www.protest-dallas-county-property-taxes-appraisals.com/Articles/Tax_reduction_myths_facts.cfm http://www.protest-dallas-county-property-taxes-appraisals.com/Federal_Tax_Reduction/index.cfm

Commercial Comparable Sales -- Matched Pair Analysis

Fri, 13 Nov 2009 04:04:01 -0500

Commercial comparable sales can be used to perform analysis regarding a variety of factors and issues impacting the value of real estate. The basic technique is to identify two sales that are identical except for the issue being evaluated. For example, to determine trends in market value over time, the sale price of a tract of land at two points in time can be compared to determine whether values are increasing or decreasing. The following is a list of some items that can be analyzed utilizing the matched pair technique: Market conditions Corner versus non-corner Size (land or buildings) Age Location Window air conditioner versus Central air conditioner HVAC versus a chilled water cooling system for apartments Original kitchen versus remodeled kitchen Swimming pool Condominium on the 4th floor versus a condominium on the 20th story of a high-rise building Following are the steps to perform a matched pair analysis: Locate comparable sales identical in all regards except for the issue being evaluated. Locating meaningful data is the most difficult part of performing a matched pair analysis. It is ideal to have two or three sets of matched pairs to evaluate a single factor. **End Summary** Topics: Houston Commercial Comparable Sales]]> Dallas Fort Worth Comm]]>]]> About the Author: ]]> Need comparable sales data? OConnorComps has thousands of current San Antonio commercial comparable sales. Is finding data too time consuming? OConnorComps has the Houston commercial comparable sales you have been looking for! http://www.oconnorcomps.com/whatnews.aspx?pgType=Commercial%20Comparable%20Sales%20-%20San%20Antonio.htm http://www.oconnorcomps.com/whatnews.aspx?pgType=Commercial%20Comparable%20Sales%20-%20Houston.htm

Low Income Housing Tax Credit Market Studies and Appraisal

Thu, 05 Nov 2009 06:33:40 -0500

Low Income Housing Tax Credit (LIHTC or Housing Tax Credit) program has been made a permanent element of chapter 42 of the Federal Income Tax Code. Owners of Low Income Housing Tax Credit Properties receive tax credits for a portion of the construction/renovation cost. Tax credits can be used to directly reduced federal income taxes. (Tax deductions reduce taxable income and thereby indirectly reduce income taxes.) Provisions of the Low Income Housing Tax Credit program require a market study be prepared as part of the application process administered by the state. (Each state in the U.S. receives a defined proportion of tax credits. A state department administers the program in each state. There are typically applications for at least three times the volume of tax credits available. Credits are allocated by the state department.) Low Income Housing Tax Credit market study requirements vary from state to state. In addition, they tend to change from year to year. Over the past 15 years, the market study required for Low Income Housing Tax Credit properties has become much more detailed. A Low Income Housing Tax Credit market study covers all issues in a typical market study. **End Summary** Topics: low income housing tax credit studies and appraisals.]]>]]> About the Author: ]]> The appraisal division of OâConnor & Associates is a national provider of commercial real estate appraisal services including cost segregation studies, due diligence, insurance valuations, gift tax valuations, lease audits, highest and best use analyses, casualty loss valuations and HUD map market studies. http://www.industrial-space-rent.com/Articles/Highest_and_Best_Use_Analysis.cfm http://www.industrial-space-rent.com/Articles/Lease_Audits.cfm

Business Valuation / Business Enterprise Appraisals

Wed, 28 Oct 2009 03:30:41 -0400

Business valuations are performed using methodology similar to the process for real estate appraisals. However in business valuation, the data sources are different. Further, there are nuances in the form of analysis. Reasons for business valuation engagements include the following: estate tax valuation and planning business purchase price allocation; divorce; loan documentation; litigation; research to determine the asking price for a business; documentation that a purchase price is equitable. Options for business valuation include : Multiple of revenue -- the revenue multiplier varies from industry to industry and with the size of the business. The appraiser compiles data for similar types of businesses with similar levels of sales and determines the business valuation based upon industry rules of thumb, features for the subject property and comparable sales and data for the sales . Comparable sales -- the appraiser seeks information for similar businesses which sold recently including revenues, net profits, assets, liabilities. Cash flow/income approach/earnings based methods -- options include a discounted cash flow analysis and multiplier of net income (typically net income before interest, taxes, depreciation and amortization, sometimes referred to as EBITDA). **End Summary** Topics: business valuation appraisal]]> cost segregation]]> real estate]]>]]> About the Author: ]]> The appraisal division of OâConnor & Associates is a national provider of commercial real estate appraisal services including Austin property tax valuation, real estate due diligence, cost segregation studies, due diligence, insurance valuations, casualty loss valuations and HUD map market studies. http://www.protest-travis-county-property-taxes-appraisals.com/Articles/real_estate_valuation.cfm http://www.protest-travis-county-property-taxes-appraisals.com/Articles/due_diligence.cfm

Casuality Loss

Tue, 20 Oct 2009 02:02:54 -0400

Casualty Losses May Significantly Reduce Federal Income Taxes Hurricane Ike inflicted a steep penalty on the Texas Gulf coast. However, there is an inconspicuous benefit – casualty loss tax deductions. Taxpayers may be able to take a 2008 deduction if either personal or business property was damaged by Hurricane Ike. Some taxpayers will be able to completely eliminate their 2008 federal income taxes by utilizing a casualty loss deduction. Even if insurance proceeds completely reimburse the cost of construction, the taxpayer likely qualifies for a substantial write-off. This is a generous tax benefit for those affected by a casualty. What is a Casualty Loss? A casualty loss is damage, destruction or loss of property from any sudden, unexpected and unusual event. Casualties can include fire, flood, hurricane, tornado, and earthquakes. The casualty loss is calculated as follows: market value of property immediately before the casualty, less the sum of: a) market value immediately after the casualty and b) insurance proceeds. For a major casualty such as Hurricane Ike, in a presidentially-declared disaster area, the deduction can be used in either the current or preceding tax year. Discuss your tax situation with your CPA or tax return preparer. I’m Insured. **End Summary** Topics: real estate appraisal]]> commercial appraisals.]]>]]> About the Author: ]]> The appraisal division of OâConnor & Associates is a national provider of commercial real estate appraisal services including insurance valuation, real estate appraisals, cost segregation studies, due diligence, casualty loss valuations and HUD map market studies. http://www.protest-waller-county-property-taxes-appraisals.com/Articles/insurance_valuation.cfm http://www.protest-waller-county-property-taxes-appraisals.com/Articles/residential_property_appraisals.cfm

Dallas Fortworth commercial comparables sales

Fri, 09 Oct 2009 06:19:42 -0400

Commercial comparable sales data for the Dallas/Fort Worth area is available from Oconnorcomps.com. Timely and accurate data regarding commercial comparable sales is essential in making prudent decisions regarding buying and selling real estate. Real estate professionals in Dallas and Fort Worth regularly rely on commercial comparable sales information from O'Connor & Associates as the basis for making decisions regarding commercial real estate. Oconnorcomps.com has more Texas commercial comparable sales data than any other source: Dallas/Fort Worth commercial comparable sales Dallas/Fort Worth land sales Texas commercial comparable sales Texas commercial land sales Commercial comparable sales data is available from oconnorcomps.com for: Dallas, Fort Worth, Houston, San Antonio, Austin, Victoria, El Paso, Brownsville, Harlingen, Midland, Odessa, Texarkana, Lufkin, Beaumont, Orange, Longview, College Station, Prairie View, Bryan, and many more cities. **End Summary** Topics: Houston Commercial Comparable Sales]]> Dallas Fort Worth Comme]]>]]> About the Author: ]]> Need comparable sales data? OConnorComps has thousands of current San Antonio commercial comparable sales. Get the data you need for a commercial comparable sales matched pair analysis from OConnorComps. http://www.oconnorcomps.com/whatnews.aspx?pgType=Commercial%20Comparable%20Sales%20-%20San%20Antonio.htm http://www.oconnorcomps.com/whatnews.aspx?pgType=Commercial%20Comparable%20Sales%20-%20San%20Antonio.htm

Tax Reductions and the IRS Position on Cost Segregation

Wed, 30 Sep 2009 04:33:34 -0400

Tax reductions and tax deductions are a common benefit of cost segregation. When real estate investors and tax practitioners learn about the income tax deductions and tax reductions resulting from cost segregation they are sometimes skeptical; they are concerned it is a tax shelter or tax scheme. This simply is not true. Cost Segregation provides a legitimate tax reduction. The IRS has published the Audit Techniques Guide (ATG) describing cost segregation and the proper methodology to achieve maximum tax reductions. They report cost segregation is a more accurate method of depreciating real estate (since it establishes a depreciation schedule based on the appropriate life for each component). Depreciation is a key component in tax reductions. Cost segregation is not difficult conceptually. It involves separating components of the real estate (such as carpet, vinyl tile, paving, sidewalks and landscaping), which have a shorter economic life and depreciate over a shorter period of time. The IRS has generally defined which components qualify for short life depreciation in the ATG. The ATG provides a safe harbor for real estate owners who depreciate real estate consistent with its guidelines. While cost segregation is simple in concept, its application is somewhat arcane. **End Summary** Topics: Cost segregation]]> federal tax reduction]]> tax reduction.]]>]]> About the Author: ]]> O"'Connor & Associates is a national provider of commercial real estate consulting services including cost segregation, federal tax reduction, due diligence, renovation upgrading cost analyses, tax return review and apartment inspections. http://www.poconnor.com/cost_segregation.asp http://www.retail-space-rent.com/Federal_Tax_Reduction/index.cfm

Commercial Real Estate Appraisal Cost Approach

Tue, 22 Sep 2009 05:12:50 -0400

The cost approach was historically prepared as a part of most commercial real estate appraisals. However, the compunction to include the cost approach (when it was not relevant) has dissipated over the last 20 years. The principle of substitution is the technical basis for employing the cost approach. According to the principal of substitution, a prudent buyer would not pay more than the cost to build a like property. In other words one would not spend $2,000,000 to purchase a new apartment complex if they could build it for 1,500,000. The cost approach value is the sum of the market value of the land, depreciated replacement cost and entrepreneurial effort. Land is typically Valued using the sales comparison approach. The replacement cost is the cost to build a building of the same quality and functional utility as the subject property. (Reproduction cost is the cost to build an exact duplicate. This approach is used occasionally for old buildings built using materials and or types of craftsmanship not currently used.) External obsolescence occurs when circumstances outside the subject property's boundaries negatively impact its value. **End Summary** Topics: cost segregation]]> real estate appraisal]]> property tax reduct]]>]]> About the Author: ]]> The appraisal division of O"'Connor & Associates is a national provider of commercial real estate appraisal services including insurance valuation, commercial real estate appraisal, cost segregation studies, due diligence, casualty loss valuations and HUD map market studies. http://www.protest-tarrant-county-property-taxes-appraisals.com/Articles/insurance_valuation.cfm http://www.protest-tarrant-county-property-taxes-appraisals.com/Appraisal/index.cfm

Arcane Income Tax Tip

Thu, 27 Aug 2009 00:22:56 -0400

Sam sold 2 commercial properties in June 2008 and was discussing tax planning with his CPA and cost segregation provider. The sales price for the properties was $5.2 million and $3.3 million. Sam had owned both properties for about 8 years. The cost segregation specialist estimated Sam could save more than $175,000 in 2008 income taxes. This would be accomplished by using cost segregation and catching-upâ€ previously under-reported depreciation. Sam has passive income from oil and gas investments and from his real estate. Sam is in the property management business and is actively involved in managing his real estate investments. Samâ€™s net income from his management company is about $400,000 per year. The fascinating question is, how does Sam reduce his income taxes by over $175,000 after he sold the properties? Tax Rate Arbitrage Sam is benefiting from tax rate arbitrage. The income tax rate for Sam on ordinary income is 35%. His capital gains rate is 15%. Sam did not obtain a cost segregation study when he purchased the properties 8 years ago. Therefore, he has been reporting too little depreciation and unknowingly paying excessive income taxes. **End Summary** Topics: Cost segregation]]> federal tax reduction]]> tax reduction]]> reducing income tax]]> appealing property tax]]> arcane tax tip and tax deduction.]]>]]> About the Author: ]]> O"'Connor & Associates is a national provider of commercial real estate consulting services including cost segregation, federal tax reduction, due diligence, renovation upgrading cost analyses, tax return review and apartment inspections. http://www.poconnor.com/cost_segregation.asp http://www.retail-space-rent.com/Federal_Tax_Reduction/index.cfm

Interview the Apartment Leasing Staff

Wed, 19 Aug 2009 05:33:53 -0400

Call the leasing staff at the five to 20 apartments you have identified using the online apartment search service. Review your notes regarding the most important criteria for your apartment. Rank your criteria in descending order (most important at the top). Review our list of questions to consider asking the leasing staff (see above link). This probably will not be the ideal list for you. You should develop your own custom list. However, this will help you to think through reasonable questions to identify the apartment which is best for you. Call all the apartments before you visit any of them. Each leasing agent will likely invite you to visit the property. They are trained to get you to agree to visit the property during the initial phone call. These initial phone calls should not take more than three to five minutes. It will be much more efficient for you to call each property which fits your criteria instead of just visiting the first 2 or 3 you call. These first apartments may not be your best option! Apartment pricing and apartment specials can vary from day to day. **End Summary** Topics: Houston apartment]]> Dallas apartment]]> Austin apartment.]]>]]> About the Author: ]]> Want the best deal on an Austin apartment? Apartments-PDQ has information on all apartments. The information is free with no registration; you get a $107 rebate. Need a San Antonio apartment fast? Apartments-PDQ gives you information on all apartments, and you get a $107 rebate. http://www.apartments-pdq.com/index.cfm?mrkt_id=1 http://www.apartments-pdq.com/index.cfm?mrkt_id=4

Tax Reductions through Cost Segregation

Mon, 10 Aug 2009 07:01:17 -0400

Tax reductions and tax deductions are both benefits of cost segregation. However, it would be inaccurate to term cost segregation a tax shelter. The IRS has written a manual titled Audit Techniques Guide that delineates methods to establish depreciation schedules and increase tax reductions. Tax shelter is a moniker that implies a scheme designed to avoid taxes. Some tax shelters were legal and some were clearly illegal. Most of the tax shelters focused exclusively on tax benefits and did not have an economic basis. There is no IRS documentation defining proper methods for implementation of tax shelters. Tax shelters included activity with the purchase and sale of stock, cattle, real estate (typically high leveraged) and oil and gas. These tax shelters often involved economic activity with a questionable or inaccurate interpretation of the law. In some cases, they involved a questionable economic activity with an accurate interpretation of the law. In other cases, there was no meaningful economic activity associated with the tax shelter. Cost segregation is simply an IRS-governed method of accurately depreciating real estate and identifying tax reductions. There is no separate economic activity. The tax reductions and tax benefits resulting from cost segregation are substantial. **End Summary** Topics: Cost segregation]]> federal tax reduction]]> tax reduction]]> reducing income tax]]> appealing property tax]]> arcane tax tip and tax deduction.]]>]]> About the Author: ]]> O"'Connor & Associates is a national provider of commercial real estate consulting services including cost segregation, federal tax reduction, due diligence, renovation upgrading cost analyses, tax return review and apartment inspections. http://www.poconnor.com/cost_segregation.asp http://www.retail-space-rent.com/Federal_Tax_Reduction/index.cfm

Cost Segregation - Tax Deductions (Taxes are the great bane of most businesses)

Fri, 31 Jul 2009 01:18:09 -0400

Taxes are your enemy, but tax deductions are your friends. Taxes are the great bane of most businesses. Alas, business deductions act as a salve to cool the burning and itching of your bank account. Business taxes can be summarized simply as calculating your total revenue, reducing this amount by as many tax deductions as you can and then paying tax on the remaining amount. Most people are not aware of all business deductions and miss out on various claims. To this end, it is important to understand the theme for deductions for businesses. When considering whether an expense is a deduction, you should ask yourself the following: 1. Did it occur as part of my small business? 2. Was it an ordinary expense associated with my business? 3. Was it a necessary expense? In addition to asking the questions above, business owners should also ask their accountant about taking advantage of cost segregation, a tax mechanism that could generate substantial savings in federal income taxes. Although it is vastly under-utilized, cost segregation is not a wildly speculative accounting tool. **End Summary** Topics: Cost segregation]]> federal tax reduction]]> tax reduction]]> reducing income tax]]> appealing property tax]]> arcane tax tip and tax deduction.]]>]]> About the Author: ]]> O"'Connor & Associates is a national provider of commercial real estate consulting services including cost segregation, due diligence, federal tax reduction, renovation upgrading cost analyses, tax return review and apartment inspections. http://www.poconnor.com/cost_segregation.asp http://www.industrial-space-rent.com/Federal_Tax_Reduction/index.cfm

Leasing Retail Space - The True Costs of Leasing Space

Thu, 23 Jul 2009 01:35:07 -0400

Occupancy Cost After obtaining information regarding the cost of tenant improvements, you should be able to estimate the cost of occupancy for your retail space. This will include rent, CAM charges, utilities and the amortized cost of tenant improvements. CAM CAM charges referred to comment area maintenance. Practice may vary from area to area, but in most areas this includes not only maintenance expenses but also the cost of taxes and insurance. Most leases for retail space include a partial or complete pass through for basic operating expenses, insurance, management, and property taxes. The landlord or leasing agent should be held to provide an estimate of these charges for your space. Amortized TI The amortized cost of your tenant improvements will be the cost over the term of your lease. To keep matters simple, if you are spending $60,000 to renovate your space, and your lease is for five years (60 months), include $1000 per month for the cost of tenant improvements. Are You Paying Too Much? Next research the occupancy cost compared to what others in your industry are spending. **End Summary** Topics: Houston retail space leasing]]> Houston office space leasing]]> ]]>]]> About the Author: ]]> In addition the data is useful to brokers who for example continually monitor Houston retail space leasing, Houston office space leasing, Houston industrial space leasing, Houston apartments, Dallas apartments, Ft. Worth apartments, Austin apartments, and San Antonio apartments. http://www.oconnordata.com/corp/mkt/News/Dallas_Apartment_Data.cfm http://www.oconnordata.com/corp/mkt/News/Austin_Apartment_Data.cfm

Cost Segregation - Tax Deductions (Taxes are your enemy, but tax deductions are your friends)

Thu, 18 Jun 2009 00:00:00 -0400

Taxes are your enemy, but tax deductions are your friends. Taxes are the great bane of most businesses. Alas, business deductions act as a salve to cool the burning and itching of your bank account. Business taxes can be summarized simply as calculating your total revenue, reducing this amount by as many tax deductions as you can and then paying tax on the remaining amount. Most people are not aware of all business deductions and miss out on various claims. To this end, it is important to understand the theme for deductions for businesses. When considering whether an expense is a deduction, you should ask yourself the following: 1. Did it occur as part of my small business? 2. Was it an ordinary expense associated with my business? 3. Was it a necessary expense? In addition to asking the questions above, business owners should also ask their accountant about taking advantage of cost segregation, a tax mechanism that could generate substantial savings in federal income taxes. Although it is vastly under-utilized, cost segregation is not a wildly speculative accounting tool. **End Summary** Topics: Cost segregation]]> federal tax reduction]]> tax reduction.]]>]]> About the Author: ]]> O"'Connor & Associates is a national provider of commercial real estate consulting services including cost segregation , federal tax reduction , due diligence, renovation upgrading cost analyses, tax return review and apartment inspections.

Lease Abstraction

Tue, 09 Jun 2009 00:00:00 -0400

Lease abstraction is an essential component of due diligence for a multi-tenant commercial property. Lease terms often vary from tenant to tenant. Lease terms and options impact both the quantity and quality of rental income. Lease terms affect the quantity of rental income by adjustments made for factors such as rental rates and escalations. Lease terms affect the quality of rental income based upon factors such as the tenants rights to lease additional space at a predetermined price or to give backspace if they no longer need it. Lease abstraction is a tedious and time-consuming process, particularly for properties with numerous tenants. Each lease is often 20 to 100 pages in length. In many cases, the lease form varies from tenant to tenant depending on whether the tenant or the landlord originated the lease form and which of a series of owners executed the original lease. Multiple special terms can be included in various portions of the lease. These modifications can substantially impact cash flow and the value of the property. Following are some of the lease terms which should be considered when conducting a lease abstraction: Renewal rights; First right of refusal; **End Summary** Topics: Lease Abstraction]]> cost segregation studies]]> due diligence]]> ]]>]]> About the Author: ]]> The appraisal division of O"'Connor & Associates is a national provider of commercial real estate appraisal services including partial interest valuation , insurance valuation , cost segregation studies, due diligence, feasibility studies, financial modeling and gift tax valuations.

Investment hypothesis

Mon, 01 Jun 2009 00:00:00 -0400

Investors usually have a basic premise for making a particular investment. Oâ€™Connor and Associates terms this concept the investment hypothesisâ€. Evaluating the accuracy of the investment hypothesis early in the acquisition process allows the investor to increase their returns and reduce due diligence expenses. Following are examples of typical investment hypotheses: This property will yield an unleveraged 7% return based on its current revenues and expenses. There is an existing tenant with a below-market rent for half the space in this office building. By either increasing their rent to market or replacing them with a tenant at a market rate rent when their lease expires in three years, this building will generate an 11% yield on total costs. An existing apartment complex is 60% occupied and has substantial deferred maintenance. The investor believes by spending $6,000 per unit to cure deferred maintenance he can increase rents to $.70 per square foot and generate a 10% yield on total costs. In many cases, the investment hypothesis is correct. However, in cases where the investment hypothesis is not correct, the investor can expend substantial time and due diligence costs before concluding the investment will not succeed. **End Summary** Topics: Investment hypothesis]]> condemnation appraisals]]> cost segrega]]>]]> About the Author: ]]> The appraisal division of O"'Connor & Associates is a national provider of commercial real estate appraisal services including cost segregation , due diligence, insurance valuations, residential property appraisal , feasibility studies, feasibility studies, financial modeling, highest and best use analyses and casualty loss valuations

Apartment tipsÃ¢â¬â10 tips for Finding a Great Apartment

Fri, 22 May 2009 00:00:00 -0400

Location Great apartments are in great areas. The first set to finding a great apartment is selecting an attractive area. Apartments in upscale areas will be more expensive than apartments in less attractive areas. However, in many cases you will have add a better apartment living experience in a plain apartment in an upscale area than in a deluxe apartment in a less attractive area. 1.Basic Decisions The next step is Apartments 101. Set a budget for your apartment. Select the unit type for your apartment. Gather information the apartment management will require when you complete an application. They will want information on where you have lived, contact information for the landlord, where you work, how much you make, how long you've been there and a phone number. 2. Online Search Service Find a quality online apartment search service. Only use a service which has information on all apartments in the metropolitan area. Some online apartment services only have information on 10 to 15% of the apartments in a city. 3. **End Summary** Topics: Houston apartment]]> Dallas apartment and Austin apartment.]]>]]> About the Author: ]]> Need to find an apartment in 1 day? Apartments-PDQ gives you information on all apartments, and you get a $107 rebate. Want tips for finding a great apartment? Apartments-PDQ want help!