How Passive Real Estate Lowers Taxes and Boosts Real Returns
Are you a passive real estate investor or high-earning professional looking to maximise your after-tax returns? In this episode of the Furlo Capital Real Estate Podcast, we break down how passive real estate investing can reduce taxes and boost your long-term wealth.
We dive into powerful tax strategies like depreciation, cost segregation, bonus depreciation, phantom losses, 1031 exchanges, and tax-free refinancing—everything you need to legally keep more of your hard-earned money. Whether you’re exploring real estate tax benefits, passive investing, or wealth-building strategies, this episode gives you actionable insights to grow your portfolio smarter.
Key Moments:
00:00 Intro
02:15 Understanding Depreciation in Real Estate
07:57 Cost Segregation and Bonus Depreciation Explained
14:17 Phantom Losses and 1031 Exchange Alternatives
16:28 Family Real Estate Dilemma
18:07 Delaware Statutory Trust Explained
23:03 Tax-Free Refinancing Strategy
27:48 Tax Considerations for Investors
30:51 Yearly Reading Themes and Conclusion
// 7 Key Lessons
Lesson 1: Stop judging investments by cash flow alone: Pre-tax returns can lie—after-tax yield is where real estate quietly wins, especially once depreciation enters the chat.
Lesson 2: Treat depreciation like a “phantom expense,” not a real cash hit: You’re writing off costs you already paid for (often with leverage), which can dramatically lower your taxable income without draining your bank account.
Lesson 3: Bonus depreciation is a timing tool, not a magic trick: Front-loading write-offs can zero out taxes today—but be ready for a higher bill later once depreciation is exhausted.
Lesson 4: Use refinancing as a tax-free paycheck, not a panic button: Selling triggers taxes; refinancing unlocks capital without one, letting assets fund lifestyle or new investments.
Lesson 5: Don’t fear leverage—fear unproductive leverage: When refinances fund cash-flowing assets, debt becomes a tool instead of a liability.
Lesson 6: Know your exit before you need one: Tools like Delaware Statutory Trusts exist specifically for passive investors who want out without a massive tax hit.
Lesson 7: Ask better questions as a passive investor: Depreciation schedules, cost seg plans, refinance strategy, and K-1 timing matter just as much as projected returns.
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// Let's build your wealth and improve housing, together.
I spent 12 years as a data scientist at HP and purchased $5M worth of real estate over 15 years using my own money. Now, I'm partnering with busy professionals to diversify their investments and generate passive income through real estate syndications and short-term flips—without dealing with tenants, toilets, or tantrums.
At Furlo Capital, we believe real estate isn't just a transaction; it's a partnership. Our value-add approach creates win-win situations where residents thrive, and investors build wealth. We're not just in this to make money—we want to make a difference.
If you're ready to diversify from stock market volatility and want reliable, steady returns, let's build your wealth and improve housing, together. https://furlo.com/
Contact us:
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// Disclaimers
The content on this channel is for educational and general guidance purposes only. Neither I, James Furlo, nor Furlo Capital LLC are liable for any direct, incidental, consequential, or punitive damages arising from using or accessing this content.
This content does not constitute an offer to buy or sell securities, make specific investments, or take other financial actions. Always consult a financial advisor or wealth management professional before making any investment decisions.
While I strive to ensure the information on this channel is accurate and up-to-date, it is provided "as is" without warranties or guarantees of any kind.
Comments reflect the views of the public and do not necessarily represent my own.
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