Looking for help understanding a tax strategy from a book.

[Bob Jones]

I recently read a book called Building Wealth One House at a Time by John Schaub. It recommends a tax strategy that I don't fully understand. I'm hoping someone can explain it to me.

According to the author:

"If you have cash flow from another source and you are paying income taxes now, you can start buying better located, more expensive houses. With these houses, more of your profits will come in the form of long term capital gains, taxed at a lower rate. A bonus is that if you leverage the house, it can produce a tax shelter today to offset your other income.

An advantage of investing in several houses rather than one big building is that you can buy some houses for cash flow and other property for maximum capital gains and tax shelter today."

I don't understand what this means. How does an expensive property serve as a tax shelter? How do you leverage such a property? Sorry if this is a dumb question, but I'm not familiar with this concept. Is anyone able to clear this up for me?