Quote from @Ali K.: Quote from @Bradley Hendrix: I’m hoping my story will lead to some great connections here and maybe help a few people in the process.

Reliable tenants are the exception, not the norm.A common mistake is assuming that all renters are alike so the property type is not critical.

There are some key limitations that are important:Passive losses can only offset passive income.Up to $25,000 in passive rental losses may be deducted against non-passive income if the investor actively participates and their modified adjusted gross income is below $100,000.Unused passive losses are carried forward to future tax years.Here’s an IRS article that further discusses the rules: https://www.irs.gov/publications/p9251031 ExchangesThis strategy allows investors to defer capital gains tax when they sell a property if they invest the sale proceeds into a “like-kind” property.

Fredricksburg and Galveston are big draws in Texas and the Southeast alike.

When you do a 1031 exchange, the property you purchase must be a like-kind investment, meaning you intend to hold it as a rental.

@Jackson Sincerbeaux if this is a large hedge fund that is publicly traded, then they are working with numerous brokers and wholesalers alike to find and acquire deals.

Upon selling it you exchange to a like property to defer the long term capital gain.

Like-Kind Exchange Depreciation OptionsOption 1: Generally, taxpayers must depreciate the carryover basis of property acquired in a like-kind exchange during the current tax year over the remaining recovery period of the property exchanged.

Great minds think alike!  

. **1031 Exchange:** Just a heads-up—1031 exchanges allow you to defer capital gains taxes when you sell a property and reinvest the proceeds into a "like-kind" property.