New local startup Segtax aims to automate real estate depreciation analysis

Segtax is using an automated process and a 3D model, pictured here, for cost segregation studies. (Photos courtesy Segtax)

A new Richmond startup is looking to bring some cost-saving measures to a niche part of real estate accounting.

Segtax, founded by Gregory DiNardo and Joe Acanfora, publicly launched last week as a software tool designed to automate cost segregation studies, which help real estate owners and investors calculate depreciation on a property and, specifically, its contents.

Cost segregation studies identify assets within real estate that can be accelerated for depreciation. While a real estate property is typically viewed as one asset that depreciates all at the same rate, cost segregation studies split a property into multiple assets, looking at things like cabinetry, furniture and flooring separately. 

Each of those assets has a different depreciable life, which can reduce a customer’s tax obligations. 

Historically, to perform a cost segregation study, a civil engineer would visit the property and manually take and note all measurements, from flooring to cabinetry to other aspects of the property. 

With Segtax, DiNardo said the process becomes heavily automated. 

“From a quality-of-life standpoint, there need to be tools that improve the working profession of the accounting industry. It’s a lot of data entry, a lot of Excel number crunching,” DiNardo said. “The goal is to get out of the number crunching and into higher level strategy.” 

Working either with a real estate investor or the investor’s CPA, Segtax schedules a contractor to conduct a 3D scan of the property. DiNardo said Segtax has access to thousands of contractors across the U.S. who can conduct LiDAR scans. 

Segtax uses pro-model iPhones with LiDAR cameras to make the scans. Its software automatically pulls out assets from those images that can be cost segregated from a depreciation perspective. Even things like a refrigerator are taken into account, DiNardo said. 

Data from these scans is then reviewed by two engineers with longtime cost segregation study backgrounds who are contracted with Segtax to oversee the studies and ensure IRS compliance, DiNardo said. 

Once the scan is completed, Segtax runs it through the software and gives customers a report for the CPA or real estate investor to review. 

Gregory DiNardo, left, and Joe Acanfora.

A typical Segtax process from scan to the completed report takes one to three weeks. 

Segtax started product development in March, and rolled out a demo version in April. The company officially launched to the public last week. 

Another goal and focus of Segtax is on accelerating the depreciation, trying to help real estate investors save money on their taxes, Acanfora said. 

For a real estate investor wanting a study on a single-family home or a small multifamily property, pricing for one of Segtax’s cost segregation studies would be $2,000-$3,000. For larger multifamily buildings, the cost would be $3,000-$4,000.

Segtax does work with CPAs, but is mostly focused on real estate investors as its clients. DiNardo said Segtax is toying with a subscription-based model targeted at CPAs and other tax professionals, with prices to be determined.

The founders aim for the fee to be around half the price of a traditional cost segregation study, DiNardo said, or eventually even lower than that. Cost segregation studies can run up to $15,000.  

With the hefty price tag, these studies have sometimes been limited to the bigger players in the real estate game, DiNardo said. The Segtax team hopes to make access more affordable. 

“Our goal is to open it up to somebody who’s maybe buying a duplex in the Fan. A $15,000 cost segregation study in the past didn’t financially make sense, but now, if it’s $2,000, the return on investment’s there to make it work,” DiNardo said. 

“We’re kind of taking these tax rules that only the wealthiest, largest developers can do, and we’re democratizing access to it,” Acanfora added. “Anyone who owns an investment property can use it.” 

Segtax logo

DiNardo said Segtax is generating revenue and is working with real estate investors and CPAs around the U.S. 

Segtax is in the midst of a $750,000 capital raise, the first tranche of which closed last month. Local investor Michael Jarvis and his network of angel investors were the backers of the capital raise.

DiNardo is originally from Maryland and started his career as a CPA at RSM before moving into the software world. He co-founded market research and competitive intelligence company Arbit. 

After Arbit was acquired by New York-based Ceros in 2019, DiNardo worked for Ceros for five years. He moved full-time to Richmond in 2020. 

Acanfora is from upstate New York and moved to Richmond soon after his 2015 Virginia Tech graduation. He’s held positions as a software engineer at the likes of UZURV, Mission Lane and most recently Meta. 

The two are now at Segtax full time. 

DiNardo said he’s been looking to combine his software career with his past accounting experience for the past few years. 

With a high percentage of tax professionals set to retire in the next 10 years, and the emergence of LiDAR scanning and AI, DiNardo said it felt like the right time to get a company off the ground. He met Acanfora last year, who was also looking at founding a startup in the tax space.

The pair’s mutual brainstorming and market interviews kept coming back to the topic of cost segregation, and they decided to go all in on the idea of automating the process. They formed the company in November last year and performed around 15 manual cost segregation studies during this year’s tax season before the product’s public launch in May. 

“For most companies, (cost segregation studies) haven’t evolved in the past several decades,” DiNardo said. “We saw it as kind of a ripe opportunity, and we jumped into it.” 

Segtax is headquartered at 1806 Summit Ave. in Scott’s Addition. The startup has only DiNardo and Acanfora on board full time, but the two said they are looking to hire several positions this summer for software engineers and cost segregation study specialists. DiNardo said the duo hopes to hire the two contracted engineers who review the studies as full-time employees soon. 

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