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Take Advantage of 100% Bonus Depreciation for 2024

with a secured investment in high-performing oil field housing!

Summary

This is an opportunity to acquire an income-producing “tiny home” and take advantage of Bonus Depreciation for 2023.

  • Due to its unique designation as personal property, a BoxHouse qualifies for bonus depreciation as defined under Internal Revenue Code sections 179 and 168(k).
  • Bonus depreciation is not limited to your taxable income. You can deduct any bonus depreciation amount, and if the deduction creates a net operating loss, you can carry that amount forward to any unused loss to deduct against future income.
  • Bonus depreciation can be claimed for assets used in rental activities and other passive activities, as well as in a trade or business.

Why this works.

While real estate is not eligible for the five-year bonus depreciation, revenue rulings have concluded that when a structure is movable (such as with a wheeled trailer), it is depreciable as personal property. These tiny homes are delivered on wheels, can be readily transported, and are therefore considered personal property, not real estate.

How This Compares to Similar Business Opportunities

BoxHouse is a better value for a lower price.

Average Values of Hotel Acquisitions on a Per-Door Basis

The acquisition price for a hotel on a per-room basis ranges from approximately $100,000 for a super-budget motel to $1,000,000 per door for a luxury hotel. The average acquisition price for a hotel on a per-room basis for Q2 2021 and Q2 2022 was $294,000. Notably, unlike a hotel, our tiny home comes with a full kitchen, washer/dryer, and a generous living area, no shared walls, and is not subject to daily vacancies. All these factors further validate their reasonable value.

Below are average per-room hotel construction costs.

221,000

3 Star Hotel

318,000

4 Star Hotel

604,000

5 Star Hotel

Below are some average Airbnb occupancy and rental rates

suggesting the attractive opportunity that a no-money-down BoxHouse may represent for many opportunity seekers.

Average Daily Rates (ADRs):

Economic pressures and inflation-weary consumers will lead to small ADR gains of 1.7% in 2023.

RevPAR:

Small ADR gains won’t be enough to offset occupancy losses, and RevPAR will experience a small decrease in 2023 of -1.6%.

About BoxHouse

Measuring 19 feet by 20 feet, or approximately 380 square feet, BoxHouse is designed to provide privacy and comfort by including a full kitchen, bathroom, bedroom, dining & living area. Constructed with a steel frame and walls, BoxHouse is designed to endure significantly longer than conventional stick-built houses due to its reduced susceptibility to severe weather conditions, mold, rot, etc.

Where are BoxHouses currently installed?

The majority of homes are currently being installed in West Texas.

Why West Texas? Housing has been a major challenge for oil companies to secure in rural areas. The typical living situation for an oil field worker includes numerous employees sharing small confined spaces called “Man Camps.”  Companies in West Texas are seeing the value in providing premium housing for their employees. In contrast, the alternative is an unappealing “man camp” that struggles to recruit and retain valuable employees. As evidenced by the photos below, West Texas companies have been able to utilize BoxHouse to set themselves apart from others by providing far more appealing living accommodations.

As of November 2023, the Permian Basin Leads Texas in Apartment Rent Growth!

Read The Article

Click the play button on the rendering to activate the 3D animation.

BoxHouse Amenities:

Free WiFi

Air Conditioning

Pets Allowed

Smart TV

Full Kitchen

Washer & Dryer

Suitable for Children

and Many More

This was a good place to stop for a quick night on our way across country. It’s easy access from interstate 20.

SheriStayed with a pet.

We stopped on our drive from Tucson to San Antonio to rest for the night. Our Utex rental was perfect. It was clean, spacious, comfortable and had all the amenities we needed to have dinner and accommodate my dogs. We had a restful night and prepared breakfast. Our host was very friendly and quick to respond one to our inquiries. They even mailed me my iwatch after I left it charging. Overall it was a great stay. We are definitely booking again for our next trip.

LyndaStayed with a pet.

Check-in was a breeze. The room was very clean and the host responded quickly with any questions or concerns I had.

BrandonStayed several weeks.

This place was great perfect little space for me and my family of three, they always answered our messages right away and we’re very kind!

PeytonStayed with kids.

Everything was as advertised. All contact was friendly, and clear instructions were given for check-in & check-out. The area was quiet throughout the day and night. My husband works nearby, and we will be using this host again.

MarenOne year on Airbnb

This place is amazing! Highly recommend it, look no further!! And the host is super responsive and very attentive to your needs!

RobertoStayed a week.

My stay at BoxHouse Villages was great! The place is brand new, very clean and quiet. The host was extremely responsive and helpful. Bed was comfy and there are nice amenities (full size fridge/laundry). Would stay here again.

SarahStayed with a pet.

Just as pictured. Thank you!

BryanStayed with a pet.

Great place to stay to get away! It's newer, and is so nice. I got there late, and I was able to find it no problem! It feels like it's far away from everything, exactly what I was looking for. But also, the Monahans Sandhills State Park is REAL close. The bed was super comfortable, and they kept in contact with me the whole time before check in and after! I'd stay here again.

ChristieFrom Watauga, TX

Awesome place and very cozy. one of the most unique places I've ever stayed at.

RichardFrom Girvin, TX

The house was beautiful, coffee was available, and kitchen was supplied. There are lots of good food places within a mile. We booked last minute within a couple of hours and it was ready by check in time. We slept really good. No complaints. It’s fairly new so of course there is an adjustment period of needed supplies, but the host is super nice! I would definitely stay here every time we pass through.

KimberlyThree years on Airbnb.

Super clean, cute place to stay in an area without alot of options. We have stayed twice while traveling from Tx to Az and back and would recommend.

JenniferStayed with a pet.

As Compared to Typical “Man Camps”

Below are photos of compounds within proximity as compared to BoxHouse.

References

3 – Bonus depreciation is an another category for deductions in addition to Section 179 deductions. If an asset qualifies as a long-term business property under tax rules, bonus depreciation may allow a business owner to deduct the cost of that asset more efficiently. Bonus depreciation is not subject to any annual limit, and the property does not need to be used in the business at least 51% of the time, as with a Section 179 property. The tax rules instead require the business owner to place the property in service in the year in which they are seeking a deduction for it. Bonus depreciation initially was set to gradually decline until 2020, when it was scheduled to be eliminated entirely. However, the Tax Cuts and Jobs Act altered this plan. It also extended bonus depreciation to the purchase of used property, whereas it previously had applied only to purchases of new property. For an asset that is placed in service after December 31, 2022 and before January 1, 2024, the first-year bonus depreciation amount is set at 80%.

4 – Borrowed cash is full basis, untaxed money in the borrower’s hands. These funds may be used to purchase assets with a full cost basis that enables the financier to earn profits and suffer losses in operating or disposing of the assets. If the debt is genuine and reasonable in terms of the fair market value of the purchased property, the full amount of borrowed funds generally gives rise to cost basis. See: https://www.thetaxadviser.com/issues/2010/jun/sullivan-jun10.html

5 – There is no need to discount a note receivable to the present value when determining tax basis. See Peracchi, Donald J. et ux v. Commissioner where a 10-year note at 11% interest was held to contribute the full face value to the calculation of basis: https://www.taxnotes.com/research/federal/court-documents/court-opinions-and-orders/contribution-of-unsecured-promissory-note-increased-shareholder%27s-basis%3B-dissent-sees/1lz9n

6 – The LWHA Q2 2022 Major U.S. Hotel Sales Survey includes 133 single-asset sale transactions over $10 million which totaled ~$5.3 billion and included ~21,200 hotel rooms with an average sale price per room of $248,000. By comparison, the LWHA Q2 2021 Major U.S. Hotel Sales Survey included 60 single-asset sale transactions over $10 million which totaled $4.7 billion and included ~14,000 hotel rooms with an average sale price per room of $331,000. https://lwhospitalityadvisors.com/wp-content/uploads/2022/11/Q3-2022-Sales.pdf

8 – This is based on our suggested use/exit. As the direct owner and manager of this equipment, the financier can modify the program to include renegotiating the buyout lease or any other element of the program. Nothing herein is intended to constitute a security nor to suggest that the financier is in any way a passive party to the transaction. Each transaction is entered into on a stand-alone basis and there is no pooling arrangement.

Talk to a Representative

(435) 772-9764