Building Wealth and Reducing Tax Burdens feat. Brett Swarts

Your 1031 exchange agent or broker, he doesn't want you to know about this. The 1031 exchange companies don't want you to know about this, right? They want to keep you in this 1031 exchange. But guess what? Businesses don't work for 1031. Bitcoin doesn't work for 1031. Primary homes, stock. We're working on an NVIDIA stock sale right now for about $20 to $60 million. So these are other assets that aren't even 1031 eligible.

It's really another— creates another option set for your capital gains from just the 1031. One, you have more assets that qualify, and two, you can actually go from active to passive where it's very difficult to do if you're going 1031. 'cause you have to buy like-kind real estate.

Right? He'd been active his entire life. He's now in his early 70s and he's like, "Brent, I'm wanting to get an ROE that's stronger than my 3 to 5%." This is possible. Like you don't have to be in the old 1031. And that's really the secret here is A, identify the problem. B, clarify where you actually really want to go. And then C, find out the solution and the team to help you get there. That's kind of really the secret to all this.

Welcome back to another episode of the Invest Like a Billionaire podcast. I'm your host, Ben Frazier.

And today joined by my friend, friend Brett Swartz.

Super excited to have this conversation. If you don't know Brett, you've probably seen him around. He's been on the podcast circuit for a while, but amazing educator. He's the founder of Capital Gains Tax Solutions, and he is an expert in DSTs. And not the DSTs you're probably thinking of. These are deferred sales trusts. And when I first learned about this concept, I probably met Brett, what was it, 5 years ago? And I thought he was, you know, full of it. I'm like, This, this isn't real. And as I got to know Brett and we're in a few different groups together, just love what he kind of brings to the table, his expertise in this topic. And it's something that if you're not familiar with deferred sales trust, you need to put everything down, sit down, focus and listen the next 20, 25 minutes here. It's going to be pretty revolutionary for you in understanding how to protect and defer your taxes with anything capital gains related, not just real estate.

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Brett, welcome to the show, man.

It's so good to be here, y'all. I'll never forget meeting at Hunter Thompson's event down in Los Angeles area, and we're hanging out, and it's you and your dad. I didn't know who you guys were from anybody. I'm just shaking hands, and I'm like, and I could tell, like, yeah, these, these are the vets. Like, these are the, these are the guys that have, you know, decades of experience. And then number two, they're also cautious and skeptical. I'm like, all right, you know, and it's literally the story of the journey of this whole thing, because I was a real estate broker, Marcus Milicep, in Sacramento, and I was calling the old dogs trying to teach them new tricks. And I feel like commercial real estate in particular, especially multifamily, it's like, and I love it because that's who I am too. And I started out helping people buy and sell that, but that was like the mindset and the mentality is like, hey, 1031 value add, buy, forced appreciation. And it's not just multifamily, it's industrial as well. But the mindset is this is kind of the template. We don't need to go to the Wall Street. We don't need to go to these other things and just let's build consistent durable cash flow. And so that was, I'll never forget like seeing you guys I'm like, yep, this is like my cold calling days. It's going to take me closing the deals and showing the results, like really hands-on before they're going to move. And so I actually appreciate more of the tortoise and the hare because that's the world I come from.

No, it makes sense, especially if you're trying to pioneer a less commonly known concept, right? Because everyone knows 1031s. So if you do 1031s, that's an obvious like, oh yeah, I know that, right? This is a newer concept. The concept has been around for a long time, but the understanding of it is pretty new. So let's rewind a little bit. You know, give us a sense. You said you used to be a broker. You kind of stumbled across this idea of a deferred sales trust. What was your journey in that and what kind of initially caught your attention and kind of take us from there?

Yeah. So it's 2009. The market has really kind of, you know, getting been crushed by the great financial recession, right? And clients, friends, and family were losing half or all of their wealth. And we were in Sacramento, California, one of the bigger boom-bust cities. Most of commercial real estate actually didn't get hit that hard, at least multifamily in the 2008 crash. But those who had too much leverage, not enough liquidity or diversification, they got crushed, right? And so I saw one client in particular, I use this case, that he had $50 million worth of value-add real estate, multifamily, multiple 1031s. He got caught, his name was Steve, and Steve got caught and lost everything. Bankrupt because, partly because he had overpaid for properties. And number 2, he felt like the market was really high. And he goes, if I sell, I get crushed with the tax. If I sell and want to buy something else, I'll have to take on even more debt. And that's the problem. Like once you identify that, like the 1031 is not always your friend. And of course each tool, like a hammer has a time for it and they have a screwdriver. You have these different tools at different times. You really got to define like what are you trying to do? And so what I, what we developed during that time is really a tax flow cash flow and a debt flow mindset, right? Most of us in commercial real estate, we've been taught it's all about cash flow, right? And of course, we know about 1031s and we know about, you know, we want to defer tax. We know about cost segs and depreciation. We have some of that. But like, how much do we really dive into the timing of all of these and bringing these three together? Debt flow, we've taken for granted for a long time, right? We've taken that for granted. Now we can't take it for granted. People who took it for granted are getting crushed. And so really that, like, that pain— and Ray Dalio has a good quote, says pain plus reflection equals progress. And Ray's one of the smartest guys, wrote a book called Principles. And so basically I took the pain of 2008. Now my clients were going through this, but I was going through it myself. So my wife and I are newly married, our first baby daughter on the way, and I'm the real estate broker wannabe, right? Cold calling people, just trying to make it in the business. But I'm getting humbled really quickly because we're making no money. I don't, I mean no, I mean like zero. Like no one's closing anything, including the guys that are making a million or two a year in commissions. No one's closing anything. So, and one way I actually felt okay, but the other part I'm like, I gotta put money on the table. So I did what every real estate entrepreneur does. You get a side hustle. My side hustle was Cheesecake Factory nights and weekends selling avocado egg rolls. And I worked 70-hour weeks, Marcus Millichap, still cold calling, helping clients hold onto their properties, negotiate with banks, get tax reassessments. So I stayed in the game. And, but, and it's during this time when I learned about the deferred sales trust, because when your mind and your heart, I guess, is open to the pain of what's going on and like, man, there's got to be a better way than this 1031, things do start to show up. And it was showing up. My manager at the time had a gentleman come in and speak. He's kind of like the guy to speak on this deferred sales trust. And at that point I sat with 30 other agents and we thought we were the Navy SEALs of investment real estate saying, if this guy's saying what he's saying, this is Netflix and we've been in Blockbuster. Now at this point it's 2009, we don't even know what Netflix is. But basically I'm saying this is a game changer. But like most people, Ben, who are in commercial real estate, what do they do? Nothing, right? They sat there and they said, uh, it sounds too good to be true, or come talk to me in a few years. But I was, I think maybe naive enough, or perhaps I was hungry enough to try to solved the problem that I said, if this is true, I will go all in on this. Now at the time, I was actually kind of slow on it. I just listened to it. I started to study and practice what it was, understand the tax code of IRC 453. But as I continued to study and understand like the fundamentally why it's different than the 1031, the more I realized that, wow, this could really solve the problems for my clients. And so that's what I started to do. I started to cold call people. But if you ever heard the saying that a client's not, or a prop's not accepted in his hometown, well, I was that guy. I was the Marcus and Miloshev guy cold calling people talking about this. I The other agents in the office laughing at me. It's never going to work. What are you wasting your time on that for? Just go back to the 1031. One manager was like for it. He was like, hey, go for it. But the other manager who got put in after him said, you need to stop talking about it, right? And it's like, I give the clients the option. Like if they don't want to use it, great, use the 1031. But if they want to use it and it can solve their problem, who are we not to offer it? And so I now think it's financial 1031 or brokerage malpractice if you don't know and at least offer this to your clients because it can save a failed 1031. It can help people get out of debt. It can get diversification, get timing on their side. So kind of wrapping this all up, I just kept calling people. They kept saying, come back when a deal closes, come back when, when I actually have equity because I've been crushed. You should have called me 2 years ago, right? And so that's basically what I did. I just kept, kept at it. And then I actually started the YouTube channel, the podcast, and we went national. I basically said, you know what, I can't just stay in Sacramento and do these one-on-one calls and these one-on-one proposals. I need to go national. And so since we went national, everything has changed. We now have 5 kids, my wife and I. I was able to retire from the Cheesecake Factory. She's full-time with our kids the whole time. And I've been able to now focus exclusively on this and build a company across the country to help people with really any asset of any kind, building a capital gains tax exit plan.

Love it. And the tagline of your next book should be "From avocado egg rolls to saving millions in taxes." You know, I love that.

Yeah.

Well, so talk a little bit about those that We've been saying DST, DST.

What is it?

I mean, it's still a little fuzzy to me, so explain it to me like I'm a 5th grader.

Yeah. So a DST is a deferred sales trust. That is an installment sale coupled with a trust. A deferred sales trust is just a made-up name. Okay. By the way, not to be confused with the Delaware Statutory Trust. That's another DST. That is like the Hollywood Video to Blockbuster. Okay. It's just another 1031. Okay. We can go into that a little bit here in a while, but The deferred sale trust is essentially a seller carryback coupled with, coupled with a trust, okay? A third-party trustee. That's our role as a trustee. And essentially, let's say Ben has a property sale. In fact, we'll use an actual deal in Colorado. It was an $8 million sale where Ben's located. This is for a client who had a, this business was over 50 years old, okay? And it had zero basis. It was a C corp. He was going to pay somewhere around 35%, at least maybe 40% of the proceeds were going to be crushed with tax.

Okay.

And so we use the deferred sales trust at the sale to receive the capital and issue him a promissory note. So promises to pay him over time. And so it's think about like a delayed tax trust. You're delaying the tax. You have the full amount working for him, the $8 million versus 35% less. And they issue the, the promissory note is around, I think, 8 or 9%. And it slowly pays him over time. But here's the cool thing. The $8 million is intact and typically most clients will not dip into principal, but just live off the interest. And so of course we use the rule of compounding interest, which states if you can earn, you know, 7% compounding over 10 years, we can double the money, or 10% over, over 7 years, we can double the money. And the math just makes sense when it's big enough. Now for him, what do we really solve? Not only do we solve that ability to grow more wealth, he also wanted to be passive, right? He'd been active his entire life. He's now in his, you know, early seventies and he's like, Brett, I'm wanting to get an ROI that's much stronger than my 3 to 5%. And I'm not wanting to have to do it myself. My other ROI is my return on my time, right? Like ROT, I guess would be a better way to think about it. And so he wanted A, be passive. B, be diversified. C, increases cash on cash. And so we did all 3 of these, all tax-deferred, of course, as well. And that's where the transformation happens, is that you don't have to go into like-kind replacement properties. You can go into passive REG D deals. You can go into a deal like with Aspen Funds. You can go into stock funds, mutual funds. Now, most of our clients aren't big stock funds, mutual fund people, but we did sit in T-bills at 5% during COVID and everything was crazy. We did sit in hard money lending at 10%, which was actually like, we like money lending to real estate and we made about 10% of our money with a group that we work with together. And so, I mean, these, this is possible. Like you don't have to be in the old 1031. And that's really the secret here is that guess what? Your 1031 exchange agent or broker or real estate agent, he doesn't want you to know about this or he just doesn't even know about it, right? A, B, the 1031 exchange companies don't want you to know about this, right? And they want to keep you in this 1031 exchange. But guess what? Businesses don't work for 1031. Bitcoin doesn't work for 1031. We're the first to do Bitcoin. They have $13.5 million for Bitcoin. Primary homes. Okay. Stock. We're working on an NVIDIA stock sale right now for about $20 to $60 million. So these are other assets that aren't even 1031 eligible. And so A, identify the problem. B, clarify where you actually really want to go. And then C, find out the solution and the team to help you get there. That's kind of really the secret to all this.

Yeah. So I mean, it's really another, creates another option set for your capital gains from just the 1031. One, you have more assets that qualify. And two, in that example you gave, you can actually go from active to passive where it's very difficult to do if you're going 1031 because you have to buy like-kind real estate and you can't go and invest in a fund because that security is not real estate. So a lot of times it won't qualify unless they can do a sidecar or some kind of carve-out for a TIC. In a 1031, but that's very rare to find that. So it's very difficult to kind of lock your money up. You get to defer the taxes, which is great, but you're very, very limited in the options that you have if you continue to do the 1031. So, you know, are there any other disadvantages that maybe the DST has that a 1031 doesn't? I mean, is it all, you know, what are some of the pros and cons at a high level?

Here's the reason why I would do a 1031. By the way, we still help clients do them when they make sense. It's been a while. We haven't been buying for a few years because value has been so high. But would it make sense to do a 1031? A, it's a commodity, right? There's 5,000 QI companies out there. They all kind of do the same thing. It's like an IRA, 401. It's just really pretty simple. You're paying about $1,500 or so and the money goes to the QI. It rolls to the next property. A, would you have bought the property anyways, man? That's the first thing. Yeah, I would've bought it either way. Great. That makes sense. B, the 1031 is cheaper. There's no ongoing recurring fees. 3, like your CPA knows it in his sleep. It's really simple, right? Every broker knows it, right? Like, and then number, I guess that's 3. Number 4, you get a stepped-up basis. You get to maintain what's called the stepped-up basis, right? Which is important because upon death, the basis steps up. Your kids can walk away capital gains tax-free. But let me tell you real quickly why you wouldn't do it. Okay? Number 1, you don't, you have an old depreciation schedule. So in a 1031, the old depreciation schedule travels. And so an example of a client working with, he has about a $14 million real estate property. It's producing about $500,000 $100,000 of cash flow right now. He has no depreciation. It's fully depreciated. It's in Sacramento. Well, for him, he, I'm looking, I'm going, look, I, I go, his name's Harry. I go, Harry, like if you don't sell every single dollar you bring in, you're getting taxed on it. Like you're not working tax flow at all. You're, you have your own cash flow, but it's getting crushed with tax. I said, why don't we sell and establish a new depreciation schedule? He goes, well, bro, how do I do that? I go, well, you do a deferred sales trust first. You partner with the trust. And then once the, once money's in the trust that owes you, the part, the money in the trust can go into a new LLC and you buy a new property at the fresh depreciation schedule. And so understanding that those like levers that you can move into is really key. The next thing is we can eliminate the estate tax. So we had a client, they're worth about $30 million. They sold a $5 million apartment complex in Colorado. They actually had some decent 1031s lined up, but they said, Brett, we want to eliminate the estate tax. This gets confusing for some people because sometimes I think the stepped-up basis solves this, but it doesn't. The death tax or estate tax is basically $14 million married is the exemptions as of 2026 or $7 million single. So understand the problem. Like, you got to know, like, what is my problem? Well, if you're worth more than that, the stepped-up basis will not solve that. You have an estate tax or death tax problem. It's the government's biggest mousetrap. And so what we got to do is you got to get it outside the taxable estate. Well, what we can do with the DST Plus is remove it outside the taxable estate. Okay. And so upon the sale, we get it outside the taxable estate and all the growth is outside the taxable estate, which eliminates the 40% death tax. Now your kids can also inherit this capital gains tax-free. They also get it estate tax-free. The, the individual who, who, who, the client that did this, they'll pay cap gains tax over their lifetime, right? As they receive some of the payments back over their lifetime. And so these are some of the things. Now here's the, here's the kind of the full answer here as well. You don't have to buy in the same market. You can sell high and buy low is the goal, right? So we can sell high. I had a client who did a $13 million exit in Col— in, uh, San Diego. And what did he do? He bought T-bills, money market account, 5%. And then he also did Bitcoin at $40,000.

Okay.

He bought Bitcoin at $40,000. It's about $65,000 right now, all tax deferred. The trust did. So how cool is that? And now real— what happened in real estate over the last 24 months from when he sold it is going down. So now he's buying back into real estate, all tax deferred. And so that's really the concept, like as real estate investors, pros that you are, we are, right? We basically know when it's a buyer's market and it's a seller's market. The biggest thing that's always held us back is the timing of it all with the capital gains tax. And this is where we free it for us and people love it.

Very cool. So let's walk through just a little bit of the high-level structure. I think you've touched on it a little bit, but effectively you say you have a property that you sell, then it goes and is basically purchased or sold to a trust, or the, the, the gains are transferred to a trust. You're, I'm assuming, the grantor and the beneficiary initially, and then your firm or some intermediary acts as a trustee. Is it irrevocable trust? Is it revocable? And then how do you kind of establish— you said you can create a promissory note from the trust as the beneficiary, I'm assuming. So talk through some of the kind of pieces, how you structure just a basic deal. So we have idea of some of the movement of the money here.

Yeah. So it's first of all, it's not a transfer to a trust. Like when you think of like an irrevocable trust or revocable trust in the sense that like, let's say revocable trust is a living trust where you want to You know, avoid probate, right? That's a revocable trust where you transfer it in there, right? In this scenario, this is a third type of trust. It's called a business trust and it's a sale to a business trust. You can't own the trust, Ben, although your kids can be the beneficiaries of the 2.0. If you own the trust, it'd be taxable. You just sold it to yourself. You didn't do anything, right? In this scenario, you are selling it to a third-party trust that owes you the money and it pays you over time. By the way, it's not unlike a 1031 exchange. What do you do? You send the funds to a third-party qualified intermediary, in 1031 exchange. This is a third-party deferred sales trust. Now this trust company itself is Capital Gains Tax Solutions, but the actual trust that we form is a new EIN that only does business. Like let's say it was your deal, Ben, it'd be you and your wife, right? It'd only do business with you. The fund's never going to touch your approval or your signature. There's third-party tax preparer, there's third-party financial advisor. There's, if you want it to be, you can also just go back into your own deals if you want to. There's third-party, like, you know, Charles Schwab, They're like, there's all third-party tax attorneys. Like there's all these groups that are third-party to keep the controls and the transparency and accountability in place. But you can't, you can't have unilateral control, which is the second biggest objection to the deferred sales trust is like, right, I'm an entrepreneur, I want control. I want to control my own destiny. I'm used to being the owner, doing it all myself. Well, this is probably not for you because 20 to 30 to 50% of the proceeds are the government's anyways. So what the government's saying is, hey Ben, If you cooperate through this tax strategy and with a third-party trustee to have some accountability and compliance to this whole thing, would you, would you, we'll cooperate with 40% of which is our money. 60% is yours, right? So you can have unilateral control of 60% of your money. Let's say it's a $10 million exit in, in, in Taxifornia. You have a zero basis. You would've paid 40% tax, right? So you can have $6 million by yourself, Ben, or you can give up some controls. And have $10 million. But here's the reality. It's like a self-directed IRA. You can turn around and partner with the trust and you can run an LLC into your own active deals. So if you're an entrepreneur like us, we can go back and do our own deals, right? And this is like, you're like, oh, well, that overcomes that. Exactly right. Like a lot of people, they miss— they misread this and they go, oh, I'm just going to be a passive retired person. I don't want to be like, yeah, I don't want you to be either. In fact, we wouldn't have started the company if you couldn't be the entrepreneur that you want to be. And so if you're listening to this saying, Yeah, I want to be able to control on this and great. Well, how about an extra $4 million on a $10 million exit? You can do that. You can partner with the trust. This is like, this is the best kept secret of the whole thing. The next thing I would say is legality. People go, well, how? I haven't heard of this. Like, seems too good to be true. Well, there's thousands of transactions, 27-year track record, billions in gross sales, assets, values over the years. And here's the key. Over 29 no-change IRS audits, all of them no-change, no fines. They're literally batting 1,000. So you go, well, bro, why don't we know about this? Because you haven't met our teams to execute. This, right? That's really what it comes down to. Like, we're in the information age where people can look up information all over the internet, but it's really, really what we're really in. We're— I'm sorry, we're no longer in the information age, we're actually in the implementation age, right? Who is it that has a proven track record and system and a team in place to execute it? That's what makes all the difference, and that's what we do here at Capital Case Tax Solutions.

Got it. So you can, uh, basically sell it to the trust. Are there any limitations on your ability to you take proceeds from it? You mentioned you can get interest income if you're doing some lending or something. You can take the profit off of that principal, but what are the limitations? So you get the access and control over the $10 million. Now, can you still have access to that full $10 million over some period of time? Do you— how does that work?

Yeah, so let me give you the model right now. So, A, it all depends on how we invest the funds. I have clients sitting in T-bills, sitting in money market accounts, about 5%, and we're just picking off opportunities as they come up. We have clients sitting in about a 10% lending fund that in about 30 days we can raise our hand and get the money on about 30 days. Okay. So that's the first thing to understand is, is we can, we can invest into liquid investments or semi-30-day liquid investments, or you can go into longer-term deals. In regards to the capital itself, there's always a promissory note being set to pay you a certain amount. Starting on a certain date, right? Some of our clients like to defer the income tax for a couple years and they'll delay it for 1 or 2 years and let that accrual. So let's say it's a $10 million note out of California or, or New York and we hit it, we hit an 8% interest rate on the note. We're earning $800,000, let's say on average net of fees, which is typically pretty, pretty common what we can do. And they would've had, you know, only $6 million, right? And working for 'em and now they got the full $10. So the idea is is can we defer the income tax? You can defer it for a couple years and then you can start receiving it. Most of our clients like to only get partial interest payments starting in about year 3. Okay. Now it doesn't mean you can't access it to go into other real estate deals or, you know, do another business venture. That's all tax deferred in and out, right? The only time you pay tax on it is when you receive a personal payment to your personal account. Then you get a 1099-INT for that. So that's kind of the, that's kind of the, that's kind of the answer. Now, the promissory note can be amended and then there can be a larger amount sent out. We've had clients do that where at first they're starting with interest-only payments starting in year 1, but then 6 months into it, they're like, hey, I'd like to amend the note. The notes can be amended and it can send you a big payment. You pay tax on that. Some clients have a big payment out front. You can do that, right? So it doesn't have to be 100% in. And the last point I'll leave is sometimes we're doing a third, a third, a third. Like I had a client, $6 million exit. They did a partial 1031 exchange. Partial Delaware statutory trust and a partial deferred sales trust. So don't realize that it's not always a one-size-fits-all to solve the problem. And that's really what I want to encourage everyone to think about is like, if you are working with professionals that only have the hammer, guess what solution they're ever going to provide? It's always going to be the nail to hit the hammer, right?

Right.

Like that's all they, that's all they know how to do it. So it's, everything's always a nail. Everything's always a nail. Well, well, what if it's not always a nail? What if you're, you're, you're, it's a little more complex, right? What if it is a partner that wants to separate from a, from a, from a, a partnership separation that Juan T doesn't have to move. What if it is diversification? What if you want to get out of debt? What if you want to eliminate the estate tax? What if you want timing on your side? Well, these open up other ways to do things, and that's where the deferred sales trust comes in. It just completely blows the other things out of the water. Like, it doesn't even come close once you get it. But you got to have the conviction and the confidence that A, it's legal, B, you have controls in place, and the last one is C, that the investment's— it's got to be an investment, not an expense. You got to make sure that the fees make sense.

Right. I mean, it sounds like though, like with the 1031, you have these very limited timeframes, very limited option set. And in this you can do it without a whole lot of limitations of, you know, selling to the trust. And then it sounds like you can make investments over a period of time, right? So you have to identify one single property and, you know, make sure all your bases line up and, you know, your debt lines up. Lines up and the timing lines up, and then you can invest over time. And then it sounds like you can also plan out your tax exposure over time too, right? Because you're only getting taxed on distributions that you take from the trust. So, if you don't want to get it all up front or you want to kind of spread it out over time, you can kind of plan out that— I think you call it tax flow, right? And that's probably what you mean. But is that accurate?

You nailed it. You literally nailed it. I'll give you— I'll break it down even again with the client. Warren and Catherine sold a $2.5 million property in Sacramento and their NOI was about $120,000. They did multiple 1031 exchanges into this property. I actually was the broker on this one to help them on this. They never sold because they didn't have a great solution. They were facing, you know, rent control. They're facing fires, they're facing insurance costs that are going astronomical. But the biggest thing is they had two twin daughters a little bit later in life and they wanted to spend a lot of time with them. And they're 10 years old. And Warren is spending his time in traffic driving 2, 3, 4 hours over the weekend. He's like, why am I doing this? Like, I've got the millions, I've got, you know, 8 years really with my kids before the, the, my girls are gone, right? And then maybe, maybe another 10 before they're, you know, 20 or 15 before they're married. He's like, I want to spend time with my family. And he goes, what do I do? I'm like, well, we can sell your asset. We can increase your cash flow, which we have up to $190,000. So it's about a 60 to 70% increase cash on cash. He has all the time in the world to spend with his family. He's like, this is amazing. I have no more toilets, trash, termites. And it wasn't like a big headache of a property either. It was just enough to take that distraction away. And that's what I would say, like, why settle for the way things have always been done when what you really want is sitting, literally just sitting on a platter for you? You can go with Aspen Funds and get double-digit returns on your money. You can increase your ROI by 20, 30, 40, 60, 70%. You can be passive, you can be diversified. There's also asset protection built into this. People's heads explode on this bit and they go, it's just, it's too good to be true. And you're like, okay, come talk to my clients, right? Read the book, get the bestselling book, check out the book, come to these conferences and meet us. Like, this is what we're doing. But, but yeah, this is, and it's part of why I love it too. I grew up playing basketball and I always loved going to the away games. The away games were the best because the team would talk trash and we were like, bunch of 6-foot white guys, a couple guys a little bit taller. And like people, like we've been playing since together, we're like, we're like second grade. So we like, we were like, we never lost a championship. Seventh, eighth, ninth, 10th, 11th, 12th grade. Went to like the state semifinals, but showing up, you wouldn't think much of us, right? But we would show up to the away games and we would dominate teams and the best was like silencing the crowd. So I think this is part of why I love what I do because I know we have something so incredible. That silences the crowd. But yet there's still a lot of people that are like, what? Like, how does— it hasn't been had on 2 years ago. You know, you listen to your podcast and it's like, well, we're here now. We'd love to help you out. I'd love to show you our track record.

Very cool. Well, a couple of kind of more minute questions, but one thing I'm thinking is, you know, when you— if you invest already in Reg D offerings, you have syndications, right? When you— when you get a return of capital because of a sale, can that be applied into this DST, or does it have to be real estate or a business? Or if you have gains from the sale of an asset through an investment passively, does that qualify or no?

It all depends. Let me give you a case study for the client. He's done 6 exits out of 6 Reg D— well, actually, there were syndications. I'm sorry, those were syndications. They weren't the fund. So he was a GP. He, he did, it's $120 million worth of apartment complexes across like multiple states. So he had these smaller GP positions, right? In these 6 different exits. Now that was a traditional syndication model out of like an LLC, right? So that, that's there. Okay. So now let's go into like a fund. So it, it depends on how you've held those positions. So like if you had an LLC, for example, and that LLC invested into a fund, a million bucks, let's just say, and it turned to $3 million over 10 years or something, right? Had cash flow, but you know, and that you had shares that increased, right? In the fund, it increased exit value. Is there a way that potentially you could assign the interest of the LLC prior to the exit of the 3 and have the LLC receive it and then put into the trust? Yes. However, it all depends on the fact pattern, the details there. I'd have to see it, right? I, I'd have to see it and look through it. But it does work for private stock. It works for public stock. It needs to have at least a million-dollar net proceeds, million-dollar gain. Here's really important, right? People hear this and like, oh great, I got this $100,000 gain. I want to defer my tax. It's too small for us. Okay. And for you really, because the fees got to make sense, right? By the way, the fees are about 1.5 to 2% on a recurring basis on the AUM, which is the net proceeds into the trust, and about 1.5 on the first million to 1.25 on a one-time fee for the one-time legal fee upfront. We do this all on a conditional basis. You don't get charged unless you close. But those are basically generally the fees. Okay. So that's why we like to see a million-dollar net proceeds, million-dollar gain per transaction. Action to make this make a lot of sense. Okay. So what I would say is, Ben, if someone's listening to this and you have a scenario and you have at least $1 million net proceeds, $1 million gain, then sit down with our team, go to capitalgainstaxers.com. We'll do a one-on-one consultation with me or one of my team members and we'll find out if this is, if it could be a good fit for you.

Right. And then last question is for businesses, right? So we have a lot of folks listening to this that are entrepreneurs, business owners, some that I know are actually in the middle of a transaction to sell, like a very large capital gain. Is this something they should be talking to you about or something they can kind of think ahead of before that transaction closes?

Yeah, absolutely. So really important to understand that you must set this up prior to the close of escrow. If you've closed escrow or, you know, the business is closed, the asset's closed, it's over, right? It's too late. So there's really two windows for every asset that's not investment real estate. You must set it up prior to the close of cash flow, but even prior to the buyer removing all contingencies. If you're selling a large business, it's even more important to do planning with us early, earlier than even you want to list the business or get the offer. If you're under contract, we can still help you, but just realize the more M&A advisors and attorneys and cooks in the kitchen, the more they have their vested interest for your business to sell. So not that they're going to stop it per se, just something new to them. So we can put an option language to give you that option. So that's the first thing I says, you know, get with us now, we'll give you some quick option language just to give you the option on the table. Number one. Number two, if you're going to be considering doing a 1031 exchange, we want to encourage you to, to use our service called the Best 1031 Exit Plan. And it gives you the regular 1031 exchange with the top, top 1031 company in the country. Number two, gives you our expertise to help you navigate the deferred sales trust should that 1031 fail. Okay? Should you want a backup plan? And that's the key here, right? You want to build the right team and have the right people in place to help you execute this. And so yeah, that's the best 1031 exit plan. And in that scenario, on day 46, basically we can put the remainder into the deferred sales trust after your first 1031, or day 180, just kind of depends on when you've identified. When you've not identified, we'd work with you to really, uh, understand how that all works.

All right, cool. But what's the best way for, uh, folks listening to get a hold of you? And you have a new podcast you're launching too, right?

Yes. The first thing is, if you want to learn about capital gains tax solutions, just go to capitalgainstaxsolutions.com. Check out the new book, Building a Capital Gains Tax Exit Plan. It's a great To Start. It's an Amazon bestselling book, which is cool. We have Kevin Harrington from Shark Tank in the book. Really neat. And some other really, really smart multifamily and commercial real estate people in the book. We have a brand new podcast we're launching, in fact, on August 20th, depending on when you're listening to this, 2024. It's called Build It to Billions Podcast. So you can give more, all of it away. And we're bringing on amazing guests like Ben Fraser and hopefully your dad to talk about stewardship over our own leadership, to talk about legacy, talk about not only scaling to billions for the sake of winning in business like we all want to do, but scaling for impact. Right? And so it's an inspiration project, if you will, but also like a calling to do that. And so we're transitioning to that podcast full-time. So you can check that out by searching YouTube or iTunes, Build It to Billions.

Exciting. Brett, thanks so much for coming on, man. It's really —fun.

Thank you, man. This is the Invest Like a Billionaire podcast where we uncover the alternative investments and strategies that billionaires use to grow wealth. The tools and tactics you'll learn from this podcast will make you a better investor and help you build legacy wealth. Join us as we dive into the world of alternative investments, uncover strategies of the ultra-wealthy, discuss economic economics, and interview successful investors.