Mark Kohler argues buying one rental property a year builds wealth faster than most people realize. He maps out the tax structure wealthy investors use: operating companies for business income, retirement accounts, and rental real estate that generates passive income. Tools like 1031 exchanges and depreciation deductions let you grow and redeploy that wealth without paying full capital gains tax.
Chapters
Something I've been writing about for years. And I tell all my clients this, it's in every one of my books, is look to invest in a piece of real estate every year. Now it doesn't mean you have to go buy an expensive piece of real estate or even buy it all yourself. You might partner with two or three friends or two or three family members and create a little LLC and go buy that cute little rental property that's down the street from grandma. But if we can start to build passive residual income, that's where the wealth really is. So let's look at another trifecta. So we get down here, we've got our 1040 or our trust at the bottom. We have our S corporation kicking butt. And we're out there building our business, whatever that may be. And that's our ops side. And then on our asset side, it's really broken into two pieces, right? We've got over here IRAs, our 401ks, our health savings accounts. We just talked about that. But over here we're going to start building up some rental property. Maybe it's rental property where your kids are going to college. It could be a rental property where you vacation, could be a rental property you rent to your parents that are getting agent. So we want to be thinking, where do I go? What type of real estate speaks to me? And we get practical and careful and start learning some new skills in this area. Now, what's cool about buying rental property is it generates passive income and, and passive income is taxed. The best of all this is where you get capital gain. 1,031 exchanges, passive losses, depreciation, all the cool things rich people do, you can do it too. So while you're making money over here, we're taking that profit and redeploying it into your own portfolio of real estate.
