Client and Property Solutions
DSI Properties provides its agents and their clients with an extensive menu of services including traditional transactional brokerage, specialized tax solutions, integrated strategic partnership relations, marketing and data metrics support.
With over $200 million in closed transactions, DSI Properties has managed and owned in excess of 3.5 million square feet of commercial property. We provide our clients with creative ideas, knowledgeable staff and transaction experience on asset dispositions, acquisitions, opinions of value, due diligence and consulting. DSI Properties has tremendous experience in marketing, negotiating and successfully closing transactions for our clients.
Cost Segregation and 1031 Exchange expertise. Collaboration and alignment with CPAs and other specialized tax professionals.
Cost Segregation is a tax strategy that allows real estate owners to utilize accelerated depreciation deductions to increase cash flow, and reduce the federal and state income taxes they pay on their rental income.
This is done by breaking down and reclassifying certain interior and exterior components of a building, which are typically depreciated over 39 or 27.5 years for commercial and residential properties, respectfully, to personal property or land improvements that are depreciated over 5, 7, or 15 years.
In a 1031 Exchange capital gains taxes on the sale of a property are deferred. This Makes the 1031 Exchange potentially the single most important tax strategy for preserving and growing the value of your real estate investment.
Internal Revenue Code Section 1031 provides that “No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like-kind which is to be held either for productive use in a trade or business or for investment”.
By exchanging a property for like-kind real estate, property owners may defer their tax and use all of the sale proceeds for the purchase of replacement property. Like-kind real estate includes business investment property, but excludes any personal use property. There’s no limit on how many times you can do a 1031 exchange. You can roll over the gain from one piece of investment real estate to another, to another, and another.
A 1031 Exchanger can defer taxes by investing in a 1031 Delaware Statutory Trust (DST). A DST is a legal entity created under Delaware law that permits fractional ownership of real estate that may be used in a 1031 Exchange.
The DST property ownership structure allows an investor to own a fractional interest in institutional quality and professionally managed commercial real estate property along with other investors. Each owner receives their percentage share of the cash flow income, tax benefits, and appreciation, if any, of the DST property.
Due to the fact that DSTs are Reg D private placements they can only be sold through a FINRA registered broker dealer. DSI Properties is not a registered broker dealer but works closely with a FINRA registered broker dealer that concentrates on DST investment real estate.
Most DSTs have minimum investments as low as $100,000. The ability to purchase several DSTs in smaller amounts and diversify into different real estate sectors, as well as eliminating management responsibilities may be an attractive alternative for some 1031 investors. It is important to note that 1031 DSTs are considered speculative investments, please review the broker dealers disclosures for additional information on private placements, including considerations, limitations, and restrictions.
The Energy-Efficient Commercial Buildings Tax Deduction originally made effective on 1/1/2006, is a significant financial incentive geared towards:
- Building owners (commercial or multifamily)
• Tenants making improvements
• Architects, engineers, and other designers of government buildings
To qualify, newly constructed buildings along with improvements to existing buildings must meet or exceed certain energy reduction requirements. Recent tax legislation extended the Energy Efficient Commercial Buildings Deduction, offering a tax deduction of up to $1.80/sf to those investing in energy efficient improvements placed in service after December 31, 2005.
The Energy Efficient Home Credit, also known as the EPAct 45L Credit, is aimed at benefiting residential home developers.
In order to claim the 45L Credit, however, a developer will need an energy analysis to support its energy efficiency claims. The certification process for buildings already erected includes:
- An investigation into the composition of the building such as materials used for exterior walls and insulation, securing specifications for HVAC, windows, door and other equipment and determining the lease or sale year for the units
- An initial review by the third-party expert followed by energy efficient improvements based on this assessment
- A review by a certified rater of the property via on-site testing and computer modeling, which provides a certification package to use for filing with the IRS.
How the Client Benefits
For residential units meeting the law’s requirements, 45L allows a $2,000 tax credit per unit. For instance, the developer of an eligible 100-unit apartment building may realize a $200,000 tax benefit.
Multi-family, Single-Family, Industrial, Self-Storage, Mixed-Use,Retail, Office, Hospitality and Land
Expanded network of allied strategic partners provides unique access to off-market property opportunities, due diligence resources, architects with experience in construction and conversions. Access to capital through private equity, debt and lending facilities.
Successful brokers know the importance marketing holds when conducting business in commercial real estate. Nothing drives success better than a well-planned and executed marketing strategy. That’s why DSI Properties offers its brokerage professionals and their clients access to broad-based marketing support in the areas advertising, public relations, graphic design, brochure design, mapping, demographics and state-of-the-art technology tools.