Transcription
One of the things that I did is I did a cash-out refinance on some of my Denver properties, and I got my little pile of investment money together, and I went shopping. And so now I'm up to 10 properties.
And because of this show, I've learned about the five ways you make income from a rental house. And one of the things that I like to do is I like to look at the difference between my marginal tax rate that my accountant puts on my tax return and then, once we add in all the business expenses and deductions, what's the effective tax rate. And so when I had my portfolio review, you have 35% as the estimated tax rate for the tax savings part of the income. And I thought, well, anybody who invests in real estate certainly wouldn't have an effective rate of 35%.
And then I got curious. I wondered what it was. And so I built a little spreadsheet on myself every year: What was my total income, then what was the depreciation adjustment, what's my adjusted gross income, the taxable income, what actual tax I paid, the marginal rate, and then the effective rate. Mhm. And so I thought, I bet all the not-your-average investors are going to be like me and have way lower tax savings than that 35%.