Husband of 34 years to my college sweetheart, Janet Murphy (@janetmurphydesign on Instagram). Together we have 6 wonderful children from ages 15-31 and 5 grandchildren. I've been a licensed REALTOR since 2003 and broker since 2007. I also am a cost segregation specialist helping building owners and real estate investors maximize their tax deductions, save thousands on their income taxes and increase their cash flow. If you're a building owner you probably haven't done a study...let's connect. There is no obligation. We can run an estimate for you and really every building should be evaluated if the basis is over $150,000. I can work all over the country and not just here in the Upstate. We relocated to Greenville, SC for the lifestyle, lower cost of living, amazing amenities in the area and the growth opportunity for business and real estate. We absolutely love it here!
All opinions are expressly my own and do not represent either eXp Realty LLC, Cost Segregation Services, Inc. or any other company, organization or group that I might be affiliated with.
QT’s are well loved here in the Upstate of South Carolina and this store does some great business. It’s right in the heart of the retail shopping area known as Woodruff Road. There are 145,000 vehicles per day that travel along Woodruff Road. It’s quite remarkable.
Worth noting, there was a brand new 7-Eleven that was just built a couple of blocks away from this QT. That 7-Eleven sold in August of 2024 for $6,550,000.
If you have not experienced a QT yet, please be sure to check them out.
This came across my LinkedIn feed yesterday. I always appreciate what John Drachman has to say. He does a tremendous job of noting the key points from Newmark’s Capital Markets recent quarterly report. If you’re in commercial real estate, be sure to read Drachman’s post below.
Green Zip Tape is transforming the construction industry, and it’s only a matter of time before developers, investors, and property owners recognize it as the smarter, greener way to build. Not only does Green Zip Tape offer a more environmentally friendly approach to construction, but it also provides unmatched tax advantages that extend through the building’s life, benefiting owner after owner, year after year.
The Environmental Benefits
With Green Zip Tape, less sheetrock ends up in landfills—an impactful step toward reducing construction waste. This patent-protected tape also enables easy access to internal walls for repairs, making maintenance smoother and renovations faster, cheaper, quieter, and cleaner. It’s an innovation in sustainable building that truly minimizes environmental impact.
Maximize Financial Benefits Through Cost Segregation
The financial benefits of using Green Zip Tape are substantial. Imagine shifting approximately 10% of your project’s construction costs from the typical 27.5- or 39-year depreciation class life to a much shorter 5-year class life. For example, in a $30 million multi-family project, $3 million could be reclassified to the 5-year category, creating a significant tax advantage, even if 100% bonus depreciation isn’t renewed in 2025.
In practical terms, that $3 million reclassification translates to approximately $1 million in tax savings. Whether those savings are realized in the first year or over five years, this reclassification is a bonus on top of what you’ll get from a cost segregation study. You’re building a better building that will be able to carry on to future owners. These advantages transfer to new building owners, enhancing the building’s value and market appeal over time.
Still Deciding? Let’s Run the Numbers
If you’re considering Green Zip Tape for your project, the best way to see its value is to let us calculate the potential savings. Our team can provide a detailed analysis to help you make an informed decision.
Green Zip Tape is for Larger Projects
Green Zip Tape is currently available for projects over $10 million with significant sheetrock requirements on non-load-bearing walls. Ideal applications include multi-family, hospitality, office, student housing, senior housing and office-to-residential conversions.
I represent Green Zip Tape nationwide and am here to discuss how it could benefit your next project. Reach out today for a consultation!
Building Owners: if you started construction on a new building in 2021 or 2022 and it got completed in 2023 or 2024, it’s quite probable that it might qualify for up to $5/SF 179D Energy Efficiency Tax Deduction. This is what we call a sweet spot. Others migth call it a loophole. There’s a gap in the tax code so that you don’t have to qualify for the new highly restrictive apprenticeship rules or the prevailing wage rules.
If your building is 40,000 SF it might qualify. All kinds of buildings might qualify…strip centers, industrial, office, multi-family 4 stories or more, senior housing, student housing etc. If a public building was built or a non-profit (i.e. church, YMCA, school, library etc) this deduction might be able to be taken by one of the design firms. This is one of the craziest tax deductions in the history of mankind so you should check it out if you are a designer or architect.
What does this translate into? Well, let’s say you built a 50,000 SF industrial building / flex building. If you get $5/SF that’s a $250,000 tax deduction. The other point is this comes off the 39 year class life line…we’re all used to taking the 5 and 15 year life but this is 39 year. It’s a BIG DEAL.
Here’s the other qualifier…you have to be the one who built this or had it built by a contractor. This does not work if a developer built a spec building and immediately sold it. The deduction doesn’t work for the developer and it doesn’t work for the next owner. So if you are building and developing for your own use or investment, this is an incredible deduction for you. How many people are taking this deduction? Not a lot.
The thing with real estate is that it might be the ultimate entrepreneurial business. I know a number of these folks who have launched the Greenville, SC brokerage for Trinity Partners. Trinity Partners is established in Charlotte, Raleigh, Columbia, Atlanta and now Greenville, SC.
It’s hard to go wrong with brokers here in the Upstate of South Carolina. There are many of them. The folks who started this brokerage under the umbrella of Trinity Partners were successful young brokers at a couple of other brokerages here in the Upstate. They now offer a full service brokerage firm including property management services.
I wish them all well as they launch out on their own to build their own opportunity in commercial real estate brokerage. The Upstate Business Journal has a good article about Trinity Partners Greenville and how they continue to grow this real estate brokerage.
Reforming Tax Policy: Ideas for Stability and Growth
On Tuesday, November 5th, the American people voiced their support in a powerful way, placing control of all branches of the federal government in the hands of the Republicans under President Trump. As the new administration prepares to take office, a critical tax policy change looms: the expiration of the Tax Cuts and Jobs Act (TCJA) at the end of 2025. With tax reform on the agenda, I have some ideas that I believe would bring stability, encourage investment, and help revitalize struggling areas.
1. Make 100% Bonus Depreciation Permanent
The current policy of gradually phasing out bonus depreciation by 20% each year until it hits zero in 2027 is creating uncertainty. Instead of this cycle of temporary extensions and percentage adjustments, Congress should establish 100% bonus depreciation as a permanent feature of the tax code. This policy gives investors, developers, and business owners the confidence they need for long-term planning. Locking in 100% bonus depreciation would encourage investment, drive development, and spur economic growth, especially in underdeveloped areas. Congress has an opportunity to pass this legislation in early 2025, making it retroactive to 2024 so taxpayers can benefit immediately.
2. Fix the R&D Tax Credit
The Research & Development (R&D) Tax Credit needs an overhaul. Currently, the amortization requirement penalizes American businesses by forcing them to spread out deductions over five years instead of allowing a full deduction in the first year. Get this corrected for the 2024 tax year.
3. Capital Gains Tax Relief for First-Time Homebuyers
On the residential side, we need policies that increase the availability of homes for first-time buyers. One potential solution: allow investors who sell rental properties to first-time homebuyers to bypass capital gains and recapture taxes on the sale. By doing so, we could open up more housing inventory and make homeownership more accessible to younger generations. This concept, inspired by my friend and colleague Craig Kamman, offers a practical approach to addressing housing supply and affordability.
4. Update the Capital Gains Exemption for Homeowners
The current capital gains exemption for homeowners—$250,000 for individuals and $500,000 for married couples—has been in place since 1997. Given the significant increase in housing prices over the past two decades, these thresholds no longer reflect today’s real estate market. Adjusting the exemption to $1 million for individuals and $2 million for couples would reflect current home values, reduce tax burdens for sellers, and better align with housing inflation.
Bobby Lyons and his team at Lyons Industrial Properties does a great job here in the Upstate of South Carolina. I saw that they posted this video on cement stabilization and watched it. I had not seen this before so I’m posting it here in case more people end up becoming aware of this to help them with their properties.
**Maximizing Your Tax Savings on Building Improvements**
Let’s talk briefly about the tax benefits you might be missing out on with your building when spending money for tenant or capital improvements. If you did a $375,000 tenant improvement or capital improvement to your commercial building in 2024 and are not doing cost segregation, you’re likely overpaying your income taxes by $10,000 to $15,000 over the next five years.
Today, most of these improvements go unstudied, leaving building owners with significant, unclaimed tax savings. Typically, CPAs will record improvements as “qualified improvement property” (QIP) with a 15-year class life, which allows for 60% bonus depreciation. While that’s within the tax code, this approach often overlooks substantial five-year property within the improvements, which could yield faster and more significant tax deductions.
**Why a Study Makes Sense**
When improvements are carefully studied, a sizable portion (15–50%) can often qualify as five-year property. For example, a $375,000 improvement could yield 30-40% in five-year property. Without a study, you miss the opportunity to accelerate your deductions and enhance your cash flow.
Consider this example:
– If a study costs around $3,500, your net tax savings start showing by year two. By year five, you could be ahead by $10,000 or more.
– Even with a conservative outcome of 25% five-year property, your savings could be around $6,000 over five years; at 50%, you might save $15,000.
These are potential savings you’re leaving behind if you simply default to the QIP classification without a study.
**Optimize Your Investments**
This isn’t just about tax savings; it’s about making the most of every dollar you invest in your property. Those savings could fund more improvements, support business growth, or even personal goals.
**Let’s Get Started**
I’m John Murphy with CSSI. I’ve developed a custom calculator to help building owners and CPAs understand the real potential of cost segregation on improvements. I work nationwide, and with our network, I can handle projects in all 50 states efficiently, without incurring travel costs. So while I’m in the Southeast, I can study buildings across the rest of the country and it does not cost you more money. If you did improvements in 2024 that were more than $200,000, call me for a conversation. There’s no cost or obligation. I can run the numbers for you and you can see how this might help you.
Let me ask you this…and I don’t care how much money you have…if you knew that there was $10,000 that could be in your bank account over the next few years but instead is sitting there in the government’s IRS accounts, wouldn’t you want your money?
Learn more on my blog at www.costsegbuilding.com, and connect with me on LinkedIn or social @costsegbuilding. Let’s discuss how a study could benefit your next project and help you maximize your building’s tax efficiency.
John Murphy, CSSI / 864-276-1448 / john.murphy@cssiservices.com
I follow Barrett Lindberg on LinkedIn and he is the founder of Savoy Equity Partners which invests in Opportunity Zones (OZ) properties in Dallas, TX. If you are sitting on capital gains and would like to try to figure out a way how to defer them, you may want to look at investing in Opportunity Zones. There are plenty of details you need to pay attention to and you should consult your own tax advisor. Also, I cannot personally vouch for Barrett as I don’t know him and have not invested with him. Do you own due diligence on his investments and management. He does seem to be a straight shooter when it comes to talking real estate investment and Opportunity Zones specifically. It looks like they have a long track record of multi-family investing. He seems to have a great grasp on Dallas and Opportunity Zone investments.
Barrett Lindberg, Founder Savoy Equity Partners – Opportunity Zones
The stock market is up 23% over the past year and 100% since March 2020.
For many investors, this creates a challenging dilemma: you’re sitting on significant gains but hesitant to sell because of tax implications. This paralysis is costing you opportunities in other markets.
What if you could deploy those gains into real estate while legally deferring your taxes?
Let me share how we’re using Opportunity Zones in Dallas to help investors solve this problem.
Here’s our strategy:
𝟭. 𝗟𝗼𝗰𝗮𝘁𝗶𝗼𝗻 𝗦𝗲𝗹𝗲𝗰𝘁𝗶𝗼𝗻 We target prime Opportunity Zone locations in Dallas’s highest-growth corridors. These federally designated areas offer unprecedented tax advantages while positioning investors in the path of progress.
𝟮. 𝗗𝗲𝘃𝗲𝗹𝗼𝗽𝗺𝗲𝗻𝘁 𝗘𝘅𝗲𝗰𝘂𝘁𝗶𝗼𝗻 We’re building boutique multifamily communities that:
▪ Generate steady cash flow ▪ Meet critical housing needs ▪ Target the “missing middle” of the rental market ▪ Create long-term appreciation potential
𝟯. 𝗧𝗮𝘅-𝗔𝗱𝘃𝗮𝗻𝘁𝗮𝗴𝗲𝗱 𝗦𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲 The Opportunity Zone program offers three key benefits:
▪ Tax deferral on invested capital gains until 2027 ▪ Significant depreciation benefits during the hold period ▪ Zero capital gains tax on appreciation after 10+ years
𝟰. 𝗠𝗮𝗿𝗸𝗲𝘁 𝗙𝘂𝗻𝗱𝗮𝗺𝗲𝗻𝘁𝗮𝗹𝘀 Why Dallas? The metrics tell the story:
▪ Leading the nation in population growth ▪ Top 5 in job creation ▪ Major corporate relocation destination ▪ No state income tax
Our track record speaks for itself: Since 2011, we’ve developed and sold nearly 2,000 units in the Dallas market. We understand this market and how to execute successfully within it.
𝗜𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁 𝗧𝗶𝗺𝗲𝗹𝗶𝗻𝗲: While the Opportunity Zone program runs through 2047, the window to invest capital gains closes at the end of 2026. This program has become the most successful economic development initiative in U.S. history.
This strategy works for: ✓ Stock market gains ✓ Cryptocurrency profits ✓ Business sale proceeds ✓ Any capital gains
Are you looking to diversify your portfolio while minimizing tax impact? Let’s connect. I’m happy to share more details about our approach and current opportunities.
Photo Credit: John Murphy, Cost Seg Building – Fontaine Business Park, Columbia, SC
Greenville-based Pintail and Dunean Capital Management are the new owners of the 25 acre Fontaine Business Park in Columbia. SC. It’s a massive property with 4 office buildings and about 250,000 SF.
I had the opportunity to walk the property last week as I’ve been engaged to do the cost segregation study for the new owners. It took us about 4 hours and 12,000 steps but we got through the whole property. I had a chance to walk the property with the new property managers, Reedy Property Management, as well as one of the representatives from Dunean Capital Management.
The new owners plan to make a number of investments and of course bring on new tenants. One of the big names that is public is they have inked a deal to create a new child care for Prisma Health’s Bright Horizons. It will be an child care exclusively for local Prisma employees. I’m always amazed walking commercial buildings to see how they currently exist and then to hear what the plans are for the renovations. The Prisma Health Bright Horizon’s day care is going to be in a great spot at this complex.
There’s a lot of creative real estate pros, managers, developers and investors who are now running Fontaine Business Center. There’s a lot of space here for these guys to get very creative. I have no doubt they will turn this challenged property into a thriving business park in Columbia, SC.
