FasterFreedom LiveCast- What are the Tax Benefits of Real Estate Investing? (Episode 18)
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In episode 16 of the Faster Freedom live cast, real estate investors Sam Friend, Brian Schroeder, and Lucas Walls discuss real estate investing and taxes. They acknowledge that they are not CPAs or tax experts, but they highlight some key tax savings that real estate investors can take advantage of. The hosts introduce their five companies, including Faster House, which buys 150 to 200 houses a year, and Faster Funds Lending, which is the biggest hard money lender in the St. Louis area. They also mention Magnolia, a traditional brokerage that is expected to do over $60 million in sales this year.
The hosts discuss their rental properties and mention that they have a 100% occupancy rate out of their 115 doors. They also discuss the tax benefits of real estate investing and highlight tax-free borrowing as their favorite and best benefit. They mention that they were able to refinance their entire portfolio in April and pull out $880,000 tax-free. They emphasize that they started buying rental properties five years ago and paid down the note by the income they received from their tenants, which caused a spread in their loan-to-value ratio.
The hosts discuss their strategy of maximizing their income on rental properties by refinancing and paying down mortgages to reach 50 LTV, then either refinancing back to 80 LTV or paying them off to get as many paid off houses as possible. They put lines of credit on the paid off houses and use the money for other things, such as their hard money lending and flipping businesses. They also discuss the benefits of using equity in rental properties, emphasizing that it can be used through refinancing or lines of credit.
The hosts discuss the tax benefits of real estate investing, specifically the concept of depreciation. They explain that investors can depreciate the value of the property over 27.5 years, which means they can deduct a portion of the property's value from their taxes each year. They also clarify that it doesn't matter if the property is owned under an individual's name or a company's name, as it will still flow through to the personal tax return.
Overall, the hosts provide valuable insights into real estate investing and tax benefits, while also promoting their companies and encouraging viewers to ask questions and engage with them.
In episode 16 of the Faster Freedom live cast, real estate investors Sam Friend, Brian Schroeder, an