BRRRR pulling out income strategies

[Hector Ortiz]

Hello all, I am a new real investor investor following the turnkey BRRRR approach. I have a successful IT consulting business that has and will hopefully continue to allow me to purchase rental properties with after tax money.

With all that being said, I understand the model is about purchasing properties, refinancing, and going back to purchasing more properties. I have heard from different people that one should never pay taxes on real estate income, but how is that being done? I understand one way is utilizing depreciation to lower my active income's taxes, but when are people pulling out salaries to utilize in their non real estate life. Do most people BRRRR until they can quit their first jobs?

I have a few expenses coming up like college tuitions for two kids (perhaps even grad schools) that I know i have to budget for, and the BRRRR approach seems to me the best route for that, and plan for my eventual retirement.

Sorry for the newbie questions.  These forums are amazing.  

[Brent Coombs]

@Hector Ortiz, welcome to BP. The "BRRRR approach" requires BARGAIN buying (eg. from motivated/distressed Sellers). You'd also be looking for properties that have more value-adding POTENTIAL than what you'd be paying for.

ie. You would NOT be buying "Turnkey" properties, because they're invariably asking (close to) FULL market value.

ie. How can you refinance a property when you've ALREADY borrowed the maximum on it?

(If you DIDN'T borrow the maximum at the start, why not?)

See where I'm going with those thoughts? [For BRRRR to work, it MUST appraise much higher than it cost]. All the best...

[Regarding your tax minimization questions, I'll just say: I only recommend Investments that would have you making a PROFIT! And if you need to pay SOME extra tax on that EXTRA profit - what's  to complain about?]