Taxable income to 0 by investing in Multifamily

[Rahul Gupta]

If we sell the two houses that we just rehabbed, put all the cash we get from that as a down payment on say 5 multifamily houses, would our taxable income be $0? How do we achieve that?

[Bill B.]

Nope. You need to change your plans…

you keep these properties for a year or two because you never intended to flip them. You intended to hold for years as an investment, not flipping, a job. 
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then after you’ve rented them out as an investment you decide you want to change locations, or building type, or age, or price range, or whatever. You get them listed and BEFORE you sell them you get a QI like @Dave Foster involved and you do a 1031 exchange. You buy at least as much as you sold and reinvest all “cash”. You still haven’t avoided taxes, just deferred them. You’ve transferred your low cost basis to the new unit(s). Unless you’re lucky enough to die before eventually selling without exchanging. Then your heirs avoid all taxes.