100% Bonus Depreciation Is Back! And It’s Permanent

Why This Is Probably the Coolest Thing That’s Happened in My Business Career

I’m not going to bury the lead here, the new law that passed in July 2025 bringing back 100% bonus depreciation is absolutely insane for real estate investors. And the best part? It’s permanent now. Unless they go back and change the law, this isn’t going away like it was scheduled to before.

Let me break down why I’m so excited about this, especially for those of us investing in mobile home parks.

What Actually Changed

Before this, we were looking at a five-year step down where bonus depreciation would gradually disappear. That uncertainty made long-term planning tough. But now? The law locks it in permanently at 100%. It’s not automatically going away, which means we can make investment decisions with real confidence.

For real estate in general, this is huge. But for mobile home park investors like me? This is unbelievably great.

Why Mobile Home Parks Are Perfect for This

Here’s the thing about mobile home parks, we’re heavy in land and infrastructure. I’m talking water pipes, sewer pipes, gas pipes, electrical infrastructure, and maybe a clubhouse and pool area. Those are typically our longest-term assets, but there’s a ton of mechanical equipment throughout the property.

We’ve been doing cost segregation studies for a long time now, just to make sure everything is defendable if we ever get audited. And you know what those cost seg studies come back with 99% of the time? About 80% of the park’s purchase price falls under that 15-year threshold.

Let Me Show You the Math

This is where it gets crazy. Let’s say I buy a $10 million mobile home park. Based on our cost seg studies, $8 million of that can be written off in the first year. Just let that sink in for a second.

That’s unheard of for a real estate asset at this performance level and value. Sure, you might get that level of depreciation with gas stations or oil rigs, heavy mechanical real estate assets, and they probably still have us beat on the percentage. But here’s the difference: the yield on a gas station as a real estate asset just isn’t as good or as consistent as what we see with mobile home parks.

Mobile home parks give us consistent cash flow that performs reliably. And when you combine that with these depreciation benefits? It’s a perfect storm in the best possible way.

How It Actually Works

So here’s how the breakdown works. We typically put a max of about 50% down when we buy a park. Using that same $10 million example:

• Purchase price: $10 million

• Down payment: $5 million

• Bonus depreciation write-off: $8 million

See what’s happening there? I’m getting over 100% of my invested equity back in year one through the write-off. If I bought that park on my own and put $5 million down, I’d get $8 million worth of write-off flowing through that entity and onto my tax return.

That’s a 160% return on my equity investment from a tax perspective. In the first year.

What Happens to the ‘Extra’ Losses

Now, you might be wondering “what if I don’t need all $8 million in write-offs in year one?” Great question.

If I don’t use it all to offset other holdings and other income, those losses carry forward. We’re talking about net operating losses (NOLs) that are hugely valuable from a tax standpoint. And as a real estate professional, I can use those losses across all of my income streams.

That’s how we legally pay no tax. And I want to emphasize that word legally. This isn’t some gray area or aggressive tax strategy. This is exactly what the law is designed to do.

Where to Invest in 2026: Best Markets and Deal Flow

Okay, so you understand the tax benefits. But where should you actually be putting your money in 2026? I’ve got strong opinions on this based on what we’re seeing in the market.

Focus on Landlord-Friendly States

The best markets I’m seeing in 2026 are conservative, landlord-friendly states. That’s my main core focus, and here’s why.

If you have a judge in California or New York states where judges are going to side outside of logic you’re taking on additional risk. I’m coming at this from a residential perspective here. If you have a tenant in a rental unit (doesn’t matter if it’s a mobile home space), and the judges in that district or state are likely to rule in favor of the tenant just because of the nature of state politics, you want to avoid those states.

From a real estate investment perspective, we’re always trying to minimize risk. So we go to states that have logical judges in place for eviction court. That gives us:

• Arizona

• Texas

• Georgia

• Tennessee

• South Carolina

• North Carolina

• Florida

I probably skated over a couple, but those are my favorite states. I like Arkansas as a tertiary option too.

Now, I’ll say this. If you know a market really well and you’re deeply knowledgeable about it, I’d recommend always staying where you really understand the market. But for most investors, those states I listed are where we’re focused.

Target Major Metro Areas with Real Growth

Within those states, we’re looking at major metropolitan locations where there’s real demand. We’re always focused on demand and growth metrics.

I love the growth story of DFW. All over Dallas-Fort Worth, the growth is incredible. When you’re there on the ground, you can feel it.

I love the growth story of Phoenix. Same thing, you can feel the energy there. They’re building a ton of new homes, there’s a bunch of new multifamily going up.

Now, I need to break this down by asset class because there are different pros and cons. Right now is actually a tough time to be operating multifamily apartments in Phoenix and Dallas. There’s just so much new supply hitting the market.

But for that same reason, I love mobile home parks in those areas. We don’t compete one-for-one with the same demographics that brand new multifamily space does. We tend to have more family-oriented, working, blue-collar people. They’re in neighborhoods they really like, and it’s significantly more affordable.

We’re also trying to break into Tennessee, the Carolinas, and Central Florida. All of these areas have sustained population growth that’s continuing beyond just COVID-era trends.

What About California?

Look, I wouldn’t rule out California if you know how to play it really well. If you have great attorneys and a deep understanding of how to navigate the landlord issues there, opportunities exist.

We actually own and manage an apartment building here in San Diego. But I’ll be honest, it makes me a little nervous. Rent control is constantly on the docket. There are just so many things you need to know. That’s why I caution people on California.

If I was going all in and only owning in San Diego, I’d probably be starting to think about selling and moving into other markets just to intentionally diversify the risk.

Finding the Right Opportunities

The opportunities are out there, it just depends on where you’re located, where you’re getting your information, and how deep you’re diving into the demographics and growth.

There are opportunities everywhere if you know what you’re looking for. The key is to focus on markets where you can see population growth sustaining. Not just COVID-based growth that expanded temporarily, but real, long-term sustained growth.

If a market is still growing today and it’s not just residual from pandemic migration, that’s where you want to be. Those are the markets where you’re going to find more opportunities to add value and drive revenue.

Don’t Skip the Cost Seg Study

One more thing I can’t stress enough. Get a proper cost segregation study done. We’ve been doing these for a long time, and the main reason is to make sure we have everything defendable if we ever get audited. Yes, it costs money upfront. But the write-offs you unlock make it worth it many times over. Plus, you’ll sleep better at night knowing everything is buttoned up properly.

The Bottom Line

This permanent 100% bonus depreciation is a game-changer. For those of us in mobile home parks, we’re looking at the ability to write off more than our entire equity investment in year one. Combined with strong, consistent cash flow and strategic market selection, this creates a powerful wealth-building opportunity.

The fact that it’s permanent now means we can plan long-term with confidence. That’s rare in tax law, and we should take full advantage of it.

If you’ve been sitting on the sidelines waiting for the right opportunity, or if you’ve been building capital to deploy, this is the time. The tax benefits are locked in, the markets are strong, and the fundamentals are solid.

As always, talk to your CPA and make sure this strategy fits your specific situation. But from where I’m sitting, this is probably the coolest thing that’s happened in my business career so far.

—Disclaimer: This article reflects my personal experience and opinions. It is not tax, legal, or investment advice. Always consult with qualified professionals before making investm