What’s the real cost of not structuring your real estate deals the right way?

 

In this episode, tax advisor Brandon Hall joins Angel to unpack complex but crucial considerations for structuring real estate investments—especially when working with partners, using retirement accounts, or dealing with late-stage investors. They explore topics like capital contributions, equity dilution, partial asset dispositions, and depreciation allocation, providing real-world examples and practical scenarios. Whether you're an experienced syndicator or a first-time GP, this conversation is packed with insights on how to protect your interests and avoid costly mistakes.

 

 

[00:01 - 04:00] Are You Depreciating Three Roofs?

• The significance of understanding partial asset dispositions in real estate
• Why you need to ask your CPA about deducting replaced components
• How ignoring this detail can result in depreciating assets that no longer exist

 

[04:01 - 08:19] Loan or Equity? Deciding How to Backfill

• The need to evaluate whether capital fronted by a partner should be treated as a loan or ownership stake
• What operating agreements must account for when new money enters the deal
• Why lenders and tax implications should guide this decision

 

[08:20 - 12:23] Dilution Without Selling Shares

• The mechanics of equity dilution when new investors come into a deal
• What redemption vs. share sale means for taxes and ownership
• Why getting a professional valuation can protect all parties

 

[12:24 - 16:47] Retirement Accounts and the Depreciation Disconnect

• Why depreciation doesn’t matter the same way in retirement accounts
• How depreciation can be reallocated away from retirement investors
• The importance of “substantial economic effect” in depreciation allocations

 

[16:47 - 21:44] Avoiding Costly Mistakes in Complex Capital Structures

• When to bring in a lawyer or CPA to adjust your operating agreement
• Why timing and capital amounts affect equity and distribution rights
• The need to keep educating yourself even with professional advisors

 

 

Connect with Brandon:

 

LinkedIn: https://www.linkedin.com/in/brandonhallcpa/

 

 

Key Quotes:

 

“You own your own tax position. You've got to have a basic understanding of the questions to ask.” - Brandon Hall

 

“Just because I put in more money doesn't mean I get a bigger piece of the pie—it depends on the agreement.” - Brandon Hall

 

 

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