In the upcoming editions of The Distribution, we will emphasize a crucial aspect of our focus at BLVD: expense reduction. Currently, one of the major challenges in our business is the need to minimize operational expenses due to rising costs in labor, insurance, taxes, and other related items. As part of our strategy when acquiring a new asset, we plan to implement measures to reduce costs, specifically targeting areas such as taxes, utilities, insurance, and other miscellaneous expenses.
Starting with the most significant expense category on most multifamily Profit and Loss statements – taxes. One effective way to minimize tax costs is through the appeal process, a right afforded to every property owner. While it's typically unnecessary as we generally evaluate a new proposed tax value during acquisition, recent instances have surfaced where buildings are listed for sale below their assessed value. In such cases, part of our business plan involves purchasing the building and utilizing the appraisal in the sale process to appeal taxes. It's important to note that, thus far, we've considered this to be a potential upside in our underwriting, and we haven't structured any offers contingent on securing a lower tax assessment. Nonetheless, we conduct an annual review of our existing portfolio and enlist legal assistance to assess our proposed tax amounts, determining if there are grounds for appeal.
Outside of appealing we also have certain incentives we can take advantage of through state programs. We're excited to share that several of our properties have been approved by the 4d Housing Incentive Program offered by the State of Minnesota. This approval promises significant tax savings that will positively impact our portfolio. The program underwent enhancements in March 2023, with a substantial increase in investment, marking a clear commitment to supporting property owners.
For further details on the 4d Housing Incentive Program and to explore a specific implementation example, Click Here