Cost Segregation and Save Money in Texas Now

What is Cost Segregation and How Does It Save Investors Money?

Dallas – October 3, 2025: When investing in real estate, one of the most powerful tools for increasing cash flow and reducing tax liability is cost segregation. For Texas real estate investors — whether you own multifamily units in Dallas (75201), retail centers in Houston (77002), or short-term rentals in Austin (78701) — understanding cost segregation could mean the difference between average returns and exceptional portfolio growth.

This guide explains what cost segregation is, how it works, and why it can save investors significant money, while also showing how strategic financing through GHC Funding enhances the benefits.

Cost Segregation and Saving Money

---

What is Cost Segregation?

Cost segregation is a tax strategy that accelerates depreciation deductions on commercial and investment real estate. Normally, the IRS requires you to depreciate residential rental property over 27.5 years and commercial property over 39 years.

Through a cost segregation study, building components such as fixtures, flooring, HVAC, or landscaping are identified and reclassified into shorter depreciation periods — typically 5, 7, or 15 years.

This allows investors to claim much larger depreciation expenses upfront, significantly reducing taxable income in the early years of ownership.

---

Example of Cost Segregation in Action

Imagine you buy a multifamily property in Houston for $2 million.

• Without cost segregation: You depreciate $2M over 27.5 years = ~$72,700 per year.
• With cost segregation: A study reclassifies $500,000 into 5-, 7-, and 15-year property. Year one deductions can exceed $150,000–$200,000, cutting taxable income and boosting cash flow.

---

How Cost Segregation Saves Investors Money

1. Accelerated Depreciation = Bigger Tax Deductions
   Larger deductions in the early years free up cash to reinvest.
2. Improved Cash Flow
   Less tax liability means more cash on hand to pay down debt, fund renovations, or acquire new properties.
3. Supports Refinancing Strategies
   When paired with DSCR loans, SBA 504 loans, or bridge loans from GHC Funding, investors can maximize leverage without giving up liquidity.
4. Bonus Depreciation
   Under current tax law, eligible assets can qualify for 100% bonus depreciation, supercharging the benefits of cost segregation.
5. Offset Active Income (with Professional Status)
   Investors with “real estate professional” tax status may use cost segregation deductions to offset active income.

---

Current Market Insights for Texas Investors (as of October 2025)

Interest Rates:

• DSCR Loans: 6.25% – 8.75%
• SBA 7a Loans: Prime + 2.75% (~11.25%)
• SBA 504 Loans: 6.75% – 7.5% fixed
• Bridge Loans: 9% – 11%

Requirements:

• DSCR Ratio: 1.0–1.25 minimum
• LTVs: Up to 80%
• Property Types: Multifamily, retail, office, industrial, and SFR rentals
• Ownership: LLCs, corporations, and trusts allowed

---

Geo-Targeting: Where Cost Segregation Pays Off in Texas

• Dallas (75201, 75219): Strong commercial market, ideal for cost segregation on office buildings.
• Houston (77002, 77056): Multifamily and retail assets benefit from accelerated depreciation.
• Austin (78701, 78704): High-value short-term rentals and mixed-use properties yield strong tax offsets.
• San Antonio (78205, 78209): Growing rental market with opportunities for tax planning.
• Fort Worth (76102, 76107): Industrial and logistics assets are prime candidates for cost segregation studies.

---

External Resources for Texas Investors

• Texas Real Estate Commission (TREC) – Licensing and regulatory compliance
• Texas Comptroller of Public Accounts – State tax rules and resources
• Texas Association of Realtors – Market insights and investor tools
• Dallas-Fort Worth Real Estate Investment Association – Networking and education
• Houston Association of Realtors – Local market statistics and data

---

Q&A: Cost Segregation for Texas Real Estate Investors

Q1: How much does a cost segregation study cost?
A: Typically $5,000–$15,000 depending on property size, but the tax savings usually outweigh the cost many times over.

Q2: Can I do cost segregation on a single-family rental?
A: Yes, but the benefits are most pronounced with larger multifamily or commercial assets.

Q3: Does cost segregation increase audit risk?
A: Not if conducted by a qualified firm. The IRS recognizes and accepts properly documented cost segregation studies.

Q4: Can cost segregation help if I plan to sell soon?
A: Yes, but depreciation recapture applies. Pairing with a 1031 exchange can defer taxes.

Q5: Is bonus depreciation still available in 2025?
A: Yes, though current law phases it down; always confirm with a CPA for the latest updates.

Q6: How does GHC Funding help with cost segregation strategies?
A: By offering DSCR loans and SBA financing, GHC Funding helps you extract equity and scale investments while maximizing tax efficiency.

Q7: Do Texas Opportunity Zones work with cost segregation?
A: Yes — combining both strategies can supercharge long-term tax benefits.

---

Why GHC Funding is the Go-To Lender for Texas Investors

• Flexible Loan Programs: DSCR, SBA 7a/504, bridge loans.
• No Income Verification: DSCR loans based on rental performance, not tax returns.
• Entity-Friendly: Supports LLCs and corporations for maximum asset protection.
• Market Knowledge: Expertise in Texas real estate, from Houston to Austin.

---

Final Thoughts

Understanding what cost segregation is and how it saves investors money is a game-changer for Texas real estate investors. By accelerating depreciation, improving cash flow, and strategically reinvesting tax savings, investors can grow portfolios faster and smarter.

When combined with financing solutions from GHC Funding, the benefits multiply — making it possible to scale while keeping tax obligations under control.

---

Call to Action

👉 Ready to save money with cost segregation and strategic financing?
Visit GHC Funding or call 833-572-4327 today to explore DSCR loans, SBA financing, bridge loans, and more tailored to Texas real estate investors.

Get DSCR loan in Texas.

Loan amount requested *

USD

Subject Property Address *

City *

State/Province *

ZIP / Postal Code *

First Name *

Last Name *

Email Address *

Phone Number *

Consent *

Yes, I agree with the privacy policy and terms and conditions. You may unsubscribe at any time. 

Request Quote

---

Download Cost Segregation Savings Checklist (PDF)