Newsletter: August 2025
The Big Beautiful Bill & REPS, Why We Invest Deal-by-Deal, and 401(k)s May Include private Real Estate
It’s hard to believe we’re already in August—summer is flying by. I hope you’ve had time
to relax, recharge, and gear up for a strong finish to the year.
At Comfort Capital, momentum is at an all-time high. We’re actively closing exciting
new deals, executing across our portfolio, and on track for our biggest year ever. With
strong tailwinds behind us, we’re bringing some of the best opportunities we’ve seen in
years to our investor base.
A quick note on 2025 capacity:
After a flurry of activity to start the year, available investment space for 2025 is starting to tighten.
If you’ve been considering investing—or plan to deploy more capital before year-end—it’s
worth keeping in mind that future allocations may be limited. We’re working on a few
potential opportunities, but any new availability could be impacted by incoming 1031
exchange proceeds from properties we’re in the process of selling—assets we’ve held
with investors for several years. This month, I’ll cover:
- Big Beautiful Bill & The Real Estate Professional Status
- Why We Choose Deal-by-Deal Syndications Over Funds
- 401(k)s May Soon Include Private Real Estate
Tax Update: The Return of 100% Bonus Depreciation — and Why It’s a Huge Win for Our Investors
The Big Beautiful Bill is now in effect, bringing back 100% bonus depreciation—a powerful tax incentive that allows investors to immediately deduct the full cost of qualifying assets in the first year, rather than depreciating them over time.
Our investments in manufactured housing communities are among the biggest beneficiaries of this change. That’s because the majority of the property components—roads, utilities, fencing, and other land improvements—qualify for 100% bonus depreciation.
How it Works
When we acquire a property, we conduct a cost segregation study to break down the purchase price into: Land, Buildings, Infrastructure, Personal Property
While traditional buildings are typically depreciated over 27.5 to 39 years, shorter-life assets—like water and sewer lines, electrical infrastructure, and roads—can be depreciated over 5, 7, or 15 years. In manufactured housing communities, roughly 80% of the purchase price is often comprised of land improvements, which fall into the 15-year-and-under category.
Under current tax law, any asset with a useful life of 15 years or less qualifies for 100% bonus depreciation. That means these components can be fully expensed in year one, often resulting in a 1:1 ratio of invested equity to paper losses.
And if you’re wondering—“Ben, 80% doesn’t equal 100%, so how do I end up with 1:1 or more losses than my equity investment?”—the answer lies in leverage. The loan on the deal increases the total allocated purchase price, giving you depreciation benefits on a much larger base than just your equity contribution.
Example: A $250K investment may generate $250K + in year-one tax deductions.
What This Means For Your Taxes
How you can use these losses depends on your personal tax situation—especially whether you own other real estate or qualify as a Real Estate Professional (REPS).
- Without REPS: Depreciation can only offset passive income (e.g., rental income, K-1 distributions).
- With REPS: You can apply those losses to active income—like W-2 wages, business income, or commissions—dramatically reducing your tax liability.
For high earners, that can mean writing off $100K, $250K, or more in income—just by investing in the right real estate deal.
How to Qualify for REPS
To unlock the full benefit, you must meet the following criteria in a given tax year:
- Spend 750+ hours on real estate activities
- Spend more than 50% of your total working hours in real estate
- Show material participation in property operations
💡 Pro tip:
If you’re married, only one spouse needs to meet the REPS criteria to unlock the benefit for the entire household. And no—you do not need to be a licensed Realtor or broker to qualify.
If you or your spouse own rental real estate and are not both full-time W-2 employees or business owners in a non-real estate field, you may qualify. Be sure to confirm with your CPA.
Want to Go Deeper? Check out our podcast episode below with CPA Andy Farkas, where we break down REPS, bonus depreciation, and all things real estate tax strategy.
Real Estate Taxation Webinar (ft. Andy Farkas)🔗 https://www.youtube.com/watch?v=RzwGG_udolw
How the BBB Benefits MHC Investing🔗 https://comfortcapital.com/big-beautiful-bill/
Why We Choose Deal-by-Deal Syndications Over Funds
At Comfort Capital, we invest alongside our investors on a deal-by-deal basis. We
only raise capital when a property is under contract—whether a single asset or a multi-
property portfolio.
Compared to blind-pool funds, this model offers greater alignment, transparency, and
flexibility.
Here’s why we prefer it:
- Transparency First: You know exactly what you’re investing in—location, financials, risks, and projected returns.
- No Pressure to Deploy Capital: We raise capital when the deal is right—not because of arbitrary fund timelines or having a money gun to our head needing to deploy.
- Tax Strategy Flexibility: Deal-by-deal syndications allow us to execute 1031 exchanges, helping you defer capital gains and continue compounding wealth.
- Choose Your Own Diversification: You decide which deals to participate in based on your goals, market preference, and risk appetite.
I’ve seen both models—from my time at BlackRock to what we do now at Comfort
Capital. For serious investors, the control and clarity of deal-by-deal syndications is
hard to beat.
Policy Watch: $01(k)s May Soon Include Private Real Estate
In a noteworthy development, President Trump recently signed an executive order directing federal agencies to expand access to private market investments—including real estate—within 401(k) retirement plans.
While the rulemaking process is still underway, this could mark a major shift in how Americans invest for retirement—potentially opening the door for individuals to allocate a portion of their 401(k)s into private assets like manufactured housing communities.
Today, investors can already access these types of opportunities through self-directed IRA platforms, which offer more flexibility but often come with added complexity (transferring assets, navigating custodians, etc.) and limited mainstream support. If this new policy moves forward, it could bring private real estate access into traditional 401(k) custodians—making it significantly easier for investors to gain exposure to real estate within their retirement plans.
At Comfort Capital, we believe high-quality, cash-flowing real estate should be available to more than just institutions and ultra-high-net-worth investors. If this initiative gains traction, it could become a powerful new capital channel—and give more Americans the ability to diversify beyond public markets while investing in stable, income-producing assets.
We’re watching this closely and will keep you posted as the details emerge.
