March 29, 2025 • 42 mins
Brett Swarts reveals how the Deferred Sales Trust offers freedom, flexibility, and tax deferral for high-net-worth individuals exiting businesses or real estate investments. This innovative strategy provides an alternative to traditional 1031 exchanges by allowing sellers to defer capital gains taxes while creating truly passive income streams.
• Understanding how capital gains taxes can take 20-50% of profits when selling appreciated assets
• How Deferred Sales Trust works as an installment sale with a trust that provides complete investment flexibility
• Real-world examples including a dental practice sold for $16M generating $120K monthly in passive income
• Differences from 1031 exchanges: no like-kind requirement, no tight timelines, ability to diversify investments
• Using DST for business sales, Bitcoin, and real estate with 30-year track record of IRS compliance
• Joint venture opportunities allowing entrepreneurs to partner with their trust for new ventures
• Fee structure typically 1.5-2% annually plus one-time legal setup costs
• Estate tax benefits that can remove assets from taxable estates without charity or life insurance
• Practicing "stewardship over ownership" mindset to create generational wealth and family legacy
To learn more about implementing a Deferred Sales Trust strategy for your exit, visit capitalgainstaxsolutions.com to schedule a free consultation or pick up Brett's book "Building a Capital Gains Tax Exit Plan."
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Brett Swarts (00:07):
Truly passive income is to your freedom and
impact, as compounding interestis to your money, and so the
mindset here is to focus on howdo I become truly passive in my
income?
The big mistake most people makeis they think that the 1031
exchange is the only way to getthere, or even they think that
the opportunity zone soundsreally, really sexy on its front
(00:29):
end, in the sense that, hey,after 10 years I don't have any
tax right.
Well, people want truly passiveincome now.
They don't have to wait 10years for a project to be built,
or a project to cash flow itcan take three to five years to
cash flow, depending if they'rebuilding it from the ground up
and all of these differentthings to five years of cash
flow, depending if they'rebuilding it from the ground up
and all of these differentthings.
And so we have found that thosethat have already built the
massive wealth they want tounlock the harvest of that and
(00:52):
unlock what's called freedom andflexibility with their time,
their energy, their next venture, and that's where the Deferred
Sales Trust comes in.
John Hauber (01:04):
Welcome to the Senior Housing Investors Podcast
.
If you are an owner operator,investor, developer or buyer of
senior housing, you've come tothe right place.
The best way to stay connectedwith us is to sign up for our
weekly newsletter athavenseniorinvestments.
com.
This podcast doesn't existwithout you, our community.
(01:26):
Thank you for listening andreach out to us anytime.
Kelsie Heermans (01:36):
Welcome back everyone.
Imagine you dedicated yearsbuilding your business,
meticulously investing inBitcoin or strategically
acquiring real estate, achievingmillions in revenue.
Now picture the crushing blowof losing a substantial portion
of your hard-earned gains tocapital gains taxes upon exiting
(01:56):
.
But what if there was a betterway?
Today, we're exploringprecisely that a proven,
game-changing approach tocapital gains tax exit planning
that gives you the freedom andflexibility you crave, defers
your tax obligations, enhancesyour cash flow and, most
importantly, multiplies yourimpact for your family and your
most valuable people.
(02:17):
Joining us today is Brett Swarts, a recognized expert in capital
gains tax exit strategies andreal estate investing.
Brent has spent his careerstudying, refining and
implementing successful taxdeferral solutions and is now on
a mission to teach others howto leverage an innovative
proprietary strategy known asthe Deferred Sales Trust.
(02:39):
If you're looking to structureyour exit plan effectively
whether you're selling yourbusiness, bitcoin or real estate
, and want to reinvest passivelywith greater confidence and
control, you're in exactly theright place.
Stay tuned, as Brett sharespowerful insights and actionable
strategies you can apply rightaway.
(02:59):
Let's dive in, john.
John Hauber (03:02):
Thanks, Kelsie.
Brett.
Welcome to the show.
Let's dive in.
Great to be here.
Thanks for having us.
Yeah, many of our listeners arereal estate investors, as you
know, and some are operators.
Others are more passive andthey're either approaching an
exit or planning one down theroad.
The biggest concern, we hearcapital gains tax.
(03:23):
So let's start at the top.
What exactly is the deferredsales trust and how does it
differ from traditionalstrategies like a 1031 exchange
or opportunity zone investing?
Brett Swarts (03:36):
Yeah.
So most high net worthindividuals, when they go to
sell, they have a capital gainstax on some kind of asset,
whether it be a senior housing,a citizen living facility,
whether it be a business,whether it be Bitcoin or stock,
and so the gain is going to betaxed.
You're in Texas, so it doesn'thave any state, but you still
have that 20% federal and that3.8 Obamacare.
On most sales, that's about 24%of the gain.
(03:58):
So if you sell something for amillion dollar gain, well,
that's $240,000 of tax.
I take that by 10 million, likeyou're in California, well, you
can add another 13.3, so nowyou're at like 37, maybe up to
40 percent, with depreciationrecapture.
So we like to say that the bigproblem is people are facing
somewhere between 20 and 50percent of their gain being
crushed by capital gains tax.
(04:18):
So that's the big problem we'regoing to solve.
And so the question becomeswell, how can we solve it?
Solve it right, or what can wedo to mitigate or to defer or to
delay the tax in order tocompound the wealth?
And that's the first conceptthat I think we should focus on
is in most people actually wanttruly passive income right,
which is the ability to getcompletely passive and not have
(04:39):
to trade their time per dollarsanymore.
And so the first concept I wantto start, before we kind of go
into the tactical of what adeferred sales trust is, is that
this is this that truly passiveincome is to your freedom and
impact as compounding interestis to your money.
And so the mindset here is tofocus on how do I become truly
passive in my income?
(05:00):
The big mistake most peoplemake is they think that the 1031
exchange is the only way to getthere, or even they think that
the opportunity zone soundsreally, really sexy on its front
end in the sense that, hey,after 10 years I don't have any
tax right.
Well, people want truly passiveincome now.
They don't have to wait 10years for a project to be built
or a project to cash flow.
It could take three to fiveyears to cash flow, depending if
(05:22):
they're building it from theground up and all of these
different things.
And so we have found that thosethat have already built the
massive wealth you know and havemassive appreciation, they want
to unlock the harvest of thatand unlock what's called freedom
and flexibility with their time, their energy, their next
venture, and that's where thedeferred sales trust comes in,
(05:42):
and so the shift is making surethat you're very, very clear on
what you're solving for.
If you're just trying to, Ijust want to take care of this
tax problem and they startlooking at these different
strategies.
1031 exchange deferred salestrust.
Delaware statutory trust.
You know cost seg studies, youmay miss the point, you might be
, you know, climbing a ladder,but it's to the wrong wall and
you get to the top of the walland go I didn't really want this
(06:04):
, like I actually wanted thatother wall.
Well, you're climbing the wrongladder, and so what is a
deferred sales trust?
It's simply an installment salewith a trust.
However, the major benefits arefreedom, flexibility, tax
referral, liquidity,diversification, no like-kind
replacement requirement, no10-year hold requirement and,
(06:27):
ultimately, what our clientslove about it is it unlocks
truly passive income, which iswhat most people want these days
.
John Hauber (06:35):
That's really eye-opening, especially in the
senior housing space where youknow a timing of a 1031 isn't
always practical.
Right Deals are nuanced andreplacement properties can be
hard to align quickly.
And it's amazing how manyindividuals call me up and say
I've got 18 days to identifythree different properties.
Brett, can you walk us througha real life example where a
(06:59):
sales trust made a majordifference for a client exiting
a business or real estate deal?
Brett Swarts (07:06):
Yeah, we'll start business and then we'll go real
estate and then we'll go Bitcoin, okay.
So on the business front, wejust helped a client exit out of
their dental business dentalpractice business out of Oregon.
It was a $16 million exit ahusband and wife and they
started out as dentists and thenthey had their first practice
and then they compounded toabout six practices and they
sold it to a big group and sothey're facing 10% of the state
(07:30):
of Oregon and 20% federal, soabout 30%, okay, on the sale.
So if you look at that taxburden you just take, it's
pretty simple.
You take 16 million by 30% andyou're looking at the tax
liability of approximately $4.8million, right?
So you go on one front, I canpay 4.8 million in tax and have,
(07:51):
you know, 16 minus that, or Ican have the full 16 in this
trust that's owed to me overtime and that's just.
This is how this works.
So instead of selling it andtaking all of the cash all up
front, they sold it to the trustin exchange for a promissory
note.
So the trust issued them a note, right?
In other words, they became thebank to a trust.
This trust owes them the moneythey sold it to the trust and
(08:14):
the trust is gonna pay them back.
Now I think on this promissorynote we wrote it around 9% or
10%.
So the note is set and now it'sgonna pay them in installments
and they'll pay slowly over time.
So that's what happened and thetrust ultimately sold it to the
buyer.
So they get the same thing theybargained for.
But what happened here, john,is the trust bought and sold for
the same price and the trusthad no gain.
So this is how it works.
(08:35):
Right, it's really beautiful.
Now there's a third partyunrelated trustee.
That's our role here.
We're kind of like an IRAcompany, we're kind of like a
401k company, kind of like a lotof these things, but we're not.
We're none of those, but wehave some similarities.
So we perform the service of athird party early trustee.
So this trust is set up only todo business with this.
(08:59):
Husband and wife and theirchildren can step into their
shoes and keep it going for aslong as they want.
But most people will do thisfact pattern, john.
They'll let the full principlego in and they'll just live off
the interest.
So for this particular couple,you know it's you know $16
million and it's just using 9%interest rate, that's about
$1.44 million per year, orthat's about $120,000 per month.
(09:20):
Now, realize they've beenbuilding their business for the
last seven, eight, nine yearsblood, sweat and tears, all
their time and energy.
They've been building theirbusiness for the last seven,
eight, nine years blood, sweatand tears, all of their time and
energy.
They've been taking a fairsalary right, you know,
equitable salary to keep theirbusiness growing and you know,
and their employees andexpansion.
But at the same time, like this, changes their life, right, no
longer do they have to wait tohave the freedom and flexibility
(09:42):
with their wealth.
They, with investing taxreferral are now, with investing
in tax deferral, are now theunlock that truly passive income
, right, and so that's the firststory.
It's fantastic.
We've invested into passive realestate and mostly passive
private debt right now, which isso attractive, but we're also
putting stuff into multifamilydeals that have dropped in value
(10:02):
drastically.
We've put some into the stockmarket and we've put some into
money market accounts.
In other words, we diversifiedand we've dollar cost average.
And this is the beauty of thedeferred sales trust.
It's not just a tax deferral onthe capital gains tax, it's
also ability to invest atoptimal timing, which is really,
really cool, in a diversifiedway.
(10:23):
The second thing I'll leave withyou on this deal is they are
staying with their company for acouple of years.
In other words, they sold it tothe company but they're staying
on for two to three years towork with the company until they
probably fully exit out.
Okay, so they're still gonnaget paid salaries over the next
couple of years.
Well, guess what?
What's neat about the trust isthe trust can delay that
interest payment.
(10:43):
So, although it's set at 9% orabout 1.4 million a year, they
can say, hey, I want to delaythat, and therefore they're
delaying their income tax.
So for at least two years theydon't have, they don't take any
distribution from the trust.
So they have no state incometax, no federal income tax from
the trust.
Their working years they'llhave some tax right, which is a
(11:06):
part of it.
And then when they stop working, guess what?
We turn the trust on to startpaying them, right.
So you see how we can make thisthing an investment and not an
expense.
We can get an extra ROI therebecause they can kind of control
the.
You know, think of it like athrottle or a spigot of water.
Right, you can turn it on orturn it off in a flexible manner
(11:26):
based upon your unique you knowtax situation.
John Hauber (11:31):
So let's take that example that you just had on the
dentist and his wife.
So they go to you.
Okay, you basically do apromissory note with them 9%,
okay.
Once the property sells, thatmoney comes to you.
Is that correct?
It comes to the trust.
Brett Swarts (11:49):
Charles Schwab right, yeah, they have
third-party access.
They can see everything online.
Nothing moves without theirapproval, or their signature.
They become the creditor.
The trust is its own entity,not commingled in any other
trust or any other accounts.
It only does business with them.
But keep going.
John Hauber (12:05):
So they still retain control over their
investments.
Brett Swarts (12:08):
Is that correct?
They retain controls, so youprobably had some lenders lend
to you on some of your seniorhousing facilities.
Yes, john.
John Hauber (12:15):
Yes.
Brett Swarts (12:16):
So do they have control over the day-to-day or
control over the property?
No, not.
unless you don't pay the loanright, then they foreclose and
they take back full control.
Right, but they have controlsand protections in place.
So this is the biggest thingfor people.
Most entrepreneurs or investorsare used to having what's
called unilateral, 100%ownership control, although, if
(12:39):
you think about it, if they'reworking with banks, they still
have to, you know, be holding tothe banks.
Right, they have to send theincome and expenses statement.
They obviously pay on time,they need to get fire insurance,
they need to do all thesedifferent things to make sure
they're staying within the boxesof the lending requirements.
So the lender has controls, butthe owner of the real estate
has ownership.
Right, they're the day-to-day,so it's basically reversing it,
(13:01):
right?
So what they're doing isthey're giving up, like the
day-to-day management of thetrust in exchange for controls
and the ability to foreclose.
As a bank, however, nothingmoves without their approval of
their signature, right?
So that's important tounderstand.
So, really, what do you want toknow?
You want to know that the fundsaren't going to go somewhere
that you don't want them to go.
(13:21):
They're not going to beinvested in something that you
don't want to be invested in,that they're not going to be
paying, you know, only payingthe fees that have been agreed
upon, right?
So, like, you have all theaccess to see everything.
We have a third party taxpreparer that does all the P&Ls
and it's like a C Corp taxreturn and it has issues all of
the all of the tax documents,right?
So that's all of that piece ofit.
(13:42):
We also have a third party taxattorney CPA that provides a
lifetime audit defense, andthere's also another eyes and
ears A lot of times.
We have a third party financialadvisor that's working, you
know, like a Charles Schwab.
We have the third party trustee, so, like, we have all of these
third parties that are all, ina sense, kind of being the
checks and balances of thestructure and of the process and
(14:06):
of the movement of funds, andso all of that helps to create
the transparency and thecertainty of like, okay, I know
that I can trust this.
By the way, if they've ever done1031 exchange, guess what they
have given up control, right?
They just don't.
They're like, oh, for 45 to 180days, right?
Yeah, the challenge of the 1031exchange companies.
(14:27):
You could be very careful aboutthis right, a lot of them.
They co-mingle the funds andit's dangerous right.
So they have all these fundscoming in from these different
exchanges and they put it all ina one big pile.
And even then some of thesecompanies the ones that aren't
doing what they should be doingthey go, you know, landed or get
arbitrage on it, and thensomething happens and then
they're not able to use theexchanges.
Like this is a very, you know,serious thing, and like people
(14:48):
take that for granted that whenyou give up controls for a 1031
exchange, whereas the deferredsales trust is never commingled,
nothing moves after approval ofyour signature.
It's its own entity, its ownaccounts.
So those are how we keep theprotections there, john.
John Hauber (15:04):
So, as you know, control is everything for high
net worth individuals in manycases.
So let's talk about who thisstrategy is really built for.
Brett Swarts (15:15):
Yeah.
So it's built for thepurpose-driven entrepreneur
right, the ones who want toactually control the timing of
their investments.
They want leverage over thenegotiations.
They don't ever want to feeltrapped by that 1031 exchange.
They actually want to startthat new business venture, that
new opportunity.
And here's how we do it.
And this is the best kept secret.
In fact, the biggest myth withthe deferred sales trust is that
(15:36):
, oh man, I got to give them allthis control.
I got to be completely passive.
Now, that's certainly an option.
People want the truly passiveincome and that's that's, let's
say, 50% of our clients that arein that.
Let's say that 65 and above ageand they're really ready to
harvest and be completely kindof done with the day to day.
And I would say our otherclients between the 40 years old
(15:56):
to about 65, they're actuallystill in the game or wanna be in
the game in the sense of beingactive.
And this is what's so, so neatabout this.
In fact, this is the singlebest reason why I started this
company is because I am thatentrepreneur.
I grew up in real estate.
I grew up building real estatewith my parents.
I grew up at Marcus andMillichap, understanding how to
structure and buy investmentreal estate properties.
Multifamily was my specialty.
(16:17):
I grew up doing 1031 exchange.
In fact, it was all reallyreally good, john, until the
crash of 08.
And I'll never forget theclients who were forced into
these 1031 exchanges and theywere having all of the controls
with that one box type ofstrategy.
Now lost everything right, andthe reason they lost everything
(16:37):
is because they had too muchdebt, non-luck liquidity or
diversification and all of asudden they had a debt problem.
The banks were no longerwilling to negotiate, they were
calling loans and it was a messright.
In fact, we're seeing the samething happen today.
People overpay for properties.
About two and a half years ago,interest rates have expired in
the sense of the fixed part ofit.
Now they've adjusted to doublethe rate and the debt is sinking
(17:01):
the ship right.
And the biggest culprit of thatis the enemy of this, which is
what your broker doesn't wantyou to know.
They want to keep you in this1031 exchange.
Now, do they really want to dothat?
Well, they don't know anythingelse.
A lot of them don't knowanything else, or some of them
don't know anything else, orsome of them don't really want
to know, or the exchangecompanies don't want you to know
about this.
And so here's what we do withthe deferred sales trust, and
I'll kind of move to the realestate opportunity now to give
you an idea for this.
Okay, so we had a client in fact, they've done six exits with us
(17:24):
now but they're a multifamilysyndication expert and they have
over 3000 multifamily units andtalk about someone who wants to
continue to build their wealthby themselves.
Well, why would they use thedeferred sales trust?
Well, here's why.
In fact, his name is David.
You can hear his whole story onmy YouTube channel.
So David was selling thesemultifamily properties and the
first one we sold was about a$20 million deal in Las Vegas
(17:48):
and they had massive gains on it.
But what they were finding wasthey were not doing 1031
exchanges for a number ofreasons, a lot of them because
some of their investors justwanted to get some of their
money back and it was kind ofjust complicated.
So every syndication, theywould just pay tax and pay tax,
pay tax.
And so they said you know what,Brett, can we just take our GP
position and can we move intothe deferred sales trust?
So David and his businesspartner, jordan each set up.
(18:09):
We set up trust for each ofthem and each of their GP
positions went into the trustand they went on to do this.
Jordan five times, david, sixtimes across $120 million of
multifamily properties.
Here's the key.
They said Brett, I wanna makesure that we can go back into
our own deals.
Can we do that?
Yes.
Can we go back into a realestate fund?
Yes.
Can we go into a lending?
(18:29):
Yes.
Can we go into money marketaccounts?
Yes, most Can we go into moneymarket accounts yes, most of
these guys are not really bigstock market guys, but can we do
that?
Yes, you can do all of thosethings.
In fact, you can joint venturepartner with the trust.
This is so key, david, right,and this is what they did.
They joint venture partner withthe trust and the trust put up
the money and they went rightback and do their syndication
deal right, and this is the bestpart of the a new depreciation
(18:51):
schedule on that LLC, which isreally really important, versus
the 1031 that has the olddepreciation schedule.
Okay, so we call this having atax flow mindset and not just a
cash flow mindset, and themistake is thinking that the
1031 exchange is your end all beall, and it's not because you
have an old depreciationschedule.
The second part of it is themarket started to shift right
(19:14):
and so they were dollar costaveraging with the investments
and they weren't also overlyputting all of the investments
all in one place.
They kept some liquidity.
The liquidity now is helpingthem a lot given the
circumstances that we're in.
And so you don't have to, youknow, play all of your chips all
into one thing.
You can be that entrepreneur todo your own deals.
(19:35):
You can also diversify.
You can joint venture partnerwith the trust and you be the
managing member of a new LLC andyou can go start that business.
You can also develop realestate.
Okay, we had a client who solda $3 million business, deferred
all the tax, and he used it tobuild multifamily from the
ground up in Tennessee.
This is huge right and an old1031,.
(19:56):
First of all, you cannot 1031 abusiness.
Second of all, even if youcould 1031 a business, you can't
put it into unlike kind realestate right.
In this scenario that's out thewindow.
With the DST we can defer thetax on the sale of the business,
joint venture partner with thetrust and then build the real
estate from the ground up andjoint venture, partner with the
(20:18):
trust and then build the realestate from the ground up.
And the last one I'll leave withyou is the Bitcoin right I
promised okay, client boughtBitcoin for $50,000 and it went
to $50 million.
Okay, she worked for Google,used to okay, saw Bitcoin at
early adoption and just startedto pour money into it.
Okay, obviously, it went to themoon for her to it.
Okay, obviously, it wentthrough to the moon for her.
(20:39):
And at 54,000 a coin, we exitedfive of that 50 million and we
deferred about a 1.85 million totax.
Okay, no, having to move toPuerto Rico, not having to do
any charity or life insurance orgifting Now.
So now she's in a deferralstate.
Now watch this uh, john, the the54,000 goes up to about 68,000,
okay, and then what happens?
It crashes down to about 15,000.
So that 5 million that weexited at 54,000 was really key
(21:04):
because it was used to start aonline Khan Academy, a like Khan
Academy type of thing, right,where she's educating youth,
something she's very passionateabout.
I gave her freedom to pursueher dreams, to make a difference
for the people that she feltcalled to serve.
Fast forward Bitcoin's about90,000 a coin, or 85 right now.
She held on to the other all ofthat other 45 million, or, you
(21:24):
know, it dropped all the way,probably, like I don't know, 15
million.
Then it went over over ahundred million, right?
So this is the ability of thetrust.
It's so great.
You can sell high and sheactually, you know, if she
wanted to, we could have boughtBitcoin within the trust at
15,000 a coin and write it allthe way back up Like it's
literally the Netflix to the oldBlockbuster, john, right, like
the Blockbuster is 1031 exchange.
(21:46):
What we have is the Netflix,because it just gives so much
more flexibility than anythingelse out there.
John Hauber (21:51):
So, Brett, I got it .
I understand it.
Now, many of our audiencemembers are either selling
stabilized senior housing assetsor exiting after years of
ownership, so naturally, thequestion of legality and IRS
scrutiny comes up.
Can you explain that?
Brett Swarts (22:09):
Absolutely.
That's the most importantquestion.
In fact, there's three thingsthere's legality, there's
controls, which you've alreadytouched on, and then there's
fees.
Okay, so we'll start withlegality.
So the deferred sales trust isthe most vetted capital gains
tax referral that typically youor your CPA has never heard of
until you hear us on like apodcast or you check out our
book.
Okay, all right, it's basedupon IRC 453.
(22:33):
Here's the good news, john youhave heard about IRC 453.
I mean, in fact, you know aboutit as a seller.
Carry back, for example, if Johnhas a Texas senior housing
facility worth $20 million and,for example, if he owns it free
and clear, and, for example, ifhis depreciation is fully
depreciated, he has zero basis.
Just keep it real simple.
Well, john can find Steve downthe street and Steve could give
(22:53):
a $5 million down payment andJohn could carry a note for $15
million.
It's something that's verycommon and not as common for a
number of reasons, mainlybecause now all of John's
capital is tied to that oldasset and he has other
properties, he wants to buildother places, he wants to invest
, but he makes the deal becauseyou know the bank's interest
rates are, you know, 6%, 7%, andthe other guy would have paid,
(23:15):
you know, 18 or 17 million forit.
So he takes 20 because he cancarry the note.
But guess what happens?
The guy buys the property,doesn't know how to run it, and
one or two years later he'srenegotiating anyways or missing
payments, which forces John todo what?
Pay or foreclose on him to takethe property back, you know,
build it back up again, and nowhe's just you know, he's, you
(23:36):
know, or write the note down atthe loss, like this is the whole
problem with the traditional453 installment sale.
However, that that installmentsale goes back over 100 years
like this is tried and true taxlaw.
In fact, the same form, john,that we reported installment
sale on, if you were to do thatregular installment, is the same
form that we report the DSTinstallment sale.
So think of us like a structuredinstallment sale, right, or a
(23:59):
specialized installment sale.
So that's the first thing tounderstand.
Now let's talk about trackrecord.
Okay, thousands and thousandsand thousands of transactions
now, over a close to 30 yeartrack record and billions and
billions and billions of assetssold using it.
Okay, across all the states andabout every asset you could
think of public stock, privatestock real estate dentists,
(24:21):
optometrists a big point primaryluxury real estate, you know,
apartment buildings, car washes.
We just did a billboard sale inCalifornia for 17 million.
We just did an $8 millionautomotive sale up in
Massachusetts.
We just did a $17 million landsale in Texas.
I mean we can go on and on andon about all the deals that are
(24:41):
closing, and so that's reallyimportant to understand that
this isn't something we're justtrying for the first time.
Hey, john, let's test thisthing if it works out for you.
No, this has already beenproven.
We've already proven thestrategy, the structure.
In fact we've been tested about30 times with the IRS, state
and federal audits, promoteraudits.
We've had no changes, nofindings on any of them.
So we're batting a thousand sofar, legally speaking, through
(25:03):
the IRS audits Very important,okay.
The tax attorneys my businesspartner who are the ones that
deal with the lifetime auditdefense really important, that's
included into it.
So the track record is reallyperfect.
I'll leave another story here tokeep kind of bringing this home
.
Okay, because a lot of peoplethey'll go to their CPA and
they'll say oh, mr CPA, I heardthis podcast, would you listen
to it?
This deferred sales trust,First of all, their CPA
(25:26):
typically gets confused withwhat's called a Delaware
statutory trust Notice thatthey're both DSTs and all of a
sudden that they're like well,it doesn't work for your
business sale, or you knowDelaware's, or you know and
we'll talk.
We can talk about pros and consand, if you like, in a minute,
but they get it confused andthen, and then the moment they
go, it's not that.
Then they go wait, I haven'theard of that.
What is that?
And the problem, the challenge,becomes John, if you he's been
(25:48):
there for your family and youhave this connection with him,
you would think that if you havean ACL surgery, he'd at least
hear about that unique way thatthat ACL surgeon does it.
In fact, I played basketball incollege.
I had two ACL surgeries.
I signed my scholarship and twoweeks later I blew my knee out.
(26:12):
It was devastating, right, andI'll never forget that.
That, that uh, that doctorgiving me that knee test.
And you're in a state wherethey grab the knee and they kind
of pull it up and down and he'slike you're okay, you're good,
you know, don't worry about it,you'll be back in two weeks.
And I was like thrilled Cause Ijust signed that scholarship
and I'm all excited.
I'm said, hey, Brett, get an MRIjust in case, because this
(26:34):
whole knee test the doctorscannot see the inside of the
knee.
You need to get that.
I've heard horror stories ofpeople who came back too early,
blew their knee out and they'redone for the rest of their
career.
So I go back to the doctor andsay, mr Doctor, can I please get
an MRI?
I know it's probably fine.
He's just, you know, really Ithink, kind of upset that I'm
not trusting him.
(26:56):
But I'm just kind of like beingcautious.
So I I kind of sheepishly walkout of there with with the
referral and you know, get inthe car and drive.
You know you're going to drive45 minutes to downtown and this
is in California and you'regoing to.
You know, oh, hey, doctor,how's it going?
(27:18):
Yeah, I got your MRI back.
I'm like all right, how'd it go?
You know I'm expecting to sayall clear, you have a completely
ruptured ACL, you needreconstructive surgery, okay,
and it was like the moment'sdead still and all of the all of
the like, emotion and all ofthe frustration and all of the
like.
Just, you know, I wascompletely shocked too because I
(27:39):
wanted to believe him right.
And so the point of this is toooften we look at that family
practitioner as the specialist.
But when you have a five, ten,fifty, a hundred million dollar
exit and they've never done thesurgery before and they never
heard of it, but when you have afive, 10, 50, $100 million exit
and they've never done thesurgery before and they never
(28:01):
heard of it, you have to.
The mistake is relying on theirexpertise for something they've
never done.
Okay, now here's the reality.
If you bring them to the callwith us and we sit down, we have
the discussions and we explainthe tax law and we walk through
the track record and we showthem how it works and they sign
the NDAs Nine out of 10 join us.
In fact, they send us all oftheir clients and they're
thrilled to see that someone hasactually figured this out.
In fact, the creator of this isa CPA.
(28:22):
He is a tax attorney, he's adual CPA, tax attorney.
He's a genius.
He figured this out.
Okay and Okay.
And I'm the, I'm the guide orthe person who helps to educate
on the front end.
I'm kind of like the nurse.
Okay, and we work on aconditional basis, and so I say
that because the legality pieceis really important, but I want
to make sure people don't makethe mistake of putting too much
on their CPA what the specialistCPA and tax attorney can
(28:46):
provide.
That's the legal part.
We also have, you know,national law firms, third-party
CPAs, big-time financialadvisors they all work with us.
We are an all-in-one network.
One of them helped build PIMCOfrom $80 billion to $1.2
trillion.
He and his legal team did atwo-year due diligence and
they're a part of our innercircle.
(29:07):
They manage some of the biggestwealth in the world, so their
name's a part of it.
I mean, we have so manyresources for the legal part.
Okay, so let's assume that it'slegal.
That's number one.
Any questions on the legal partbefore we move to the next two
objections?
No, I think you covered that,brett.
Thank you, okay.
So the second one is thecontrols.
Right, so I'm third partytrustee, right, so you do have
to give up some control, right,but you have protections in
(29:29):
place.
So that's just part of the partof the.
I guess you could say thedownside.
Right, so we've talked aboutthat, but we work together as a
team.
I really love working withpeople like john like you, john
who are experts in their fieldand experts in senior housing,
multifamily or mobile home park.
These are our favorite placesto invest.
In fact, I personally invest insenior housing and memory care
(29:49):
care and independent living aswell.
I grew up my mom was an LVN andso we would go to convalescent
homes and senior housing placeswhere she'd be working, and I
was the young kid who came afterschool and I would, I would
talk, I would she'd have me cometalk with the people in the in
the housing there, right, someof them were, some of them were
the actual, like theconvalescent homes, right, so,
(30:11):
right.
So I have a big heart forsenior housing, a big heart for
real estate, a big heart forserving in a way where you're
connecting housing andhealthcare in a way, right, and
so we really want to be an assetto your team, right, to help
you make great real estateinvestment decisions.
In fact, our unique advantage iswe consider ourselves real
(30:32):
estate investment advisors Likea financial advisor is to your
you know, stock bonds, mutualfunds although we can hire those
for the trust A lot of ourentrepreneurial clients, real
estate clients.
They preferred real estatewhere they made their money.
Now they prefer, at this point,passive real estate, for most
of them, right.
And so we help to build outthese, these plans and these,
these allocations, based upontheir risk tolerance, based upon
(30:52):
their certainty of convictionfor different parts of the food
group of the commercial realestate world.
And so that's part two, that'sthe controls piece.
The last part is fees.
Okay, so the fees have to makesense, they have to win for you,
the client, and so we work on arecurring fee basis as a
(31:12):
trustee, okay, so one of thefirst fees is that when the
funds come into our trusteeship,we get a recurring fee and it's
somewhere around one and a halfto 2% of that AUM.
So for every million, it'sabout 15 to 20,000 on a yearly
basis.
Now, this can include afinancial advisor, if we have
one, right.
But no matter how and where youinvest the funds, it's about
(31:33):
one and a half to 2%.
You have some breaks as you goup, you know.
So keep that in mind, dependingon the dollar volume.
So that's the recurring fee forthe trustee work.
Now we write our notes again at.
You know, eight, nine, 10%.
We can typically netcompounding eight, nine, 10%,
net of our fees.
Okay, so we cash flow, our fees.
So this is a way to reallyalign.
(31:54):
We typically can double andtriple people's cash on cash
return and then free up theirtime and their energy.
The other fee is the one-timelegal fee based upon the gross
sales price.
And so if it was a milliondollar exit, it'd be about
$15,000, okay On the firstmillion.
If it was a two million exit,it $15,000.
Okay on the first million.
(32:14):
If it was a 2 million exit,it'd be 15,000 on that first
million, 1.25 on anything abovethe million.
Our minimum is a million dollarnet proceeds, million dollar
gain.
So these are for larger exits.
The last thing I'll say is thatwe can eliminate the estate tax.
So for anyone who's listeningand they say, Brett, I have a
net worth, I'm married, it'sgreater than 28 million or 14
million.
Single, you have what's calleda death tax challenge.
(32:34):
Here's the reality.
We've been taught that the 1031exchange is the best because
you can swap until you drop andget a stepped up basis.
Right, I'm tax-free.
Hold on a second.
You're not tax-free.
Your capital gains tax-free, atleast your kids are.
But you're not estate tax-free.
In fact, if you've seen the showYellowstone, that's the entire
show Kevin Costner has the landand Beth, the daughter's like
(32:57):
dad, you got to sell the land.
And he's like I'm never goingto sell.
He's like but if you don't sellthat and you die, the debt tax
is going to force the saleanyways.
And Kevin's like I'm notselling.
And so this is the entirepremise of the entire show.
And so what we say is we go,kevin, kevin, use a DST plus,
sell the land and get thewhatever it's worth 200 million
(33:19):
or a hundred million or abillion dollars out of your
taxable estate.
And one day before you die, andall of that, now you had to
sell the land, you had to sellthe property, but now all of
that equity is outside thetaxable estate.
No charity, life insurance orgifting required.
This is so powerful, okay, Idon't want anyone to miss this,
(33:40):
and your legacies, your children, can be the beneficiaries of
this trust, and all of thegrowth between the time we do
that sale and the time you passaway is forever outside your
taxable estate.
This is so huge, okay, becauseso many people have not done the
planning, proper planning, orthey have to buy a bunch of life
(34:00):
insurance that's reallyexpensive.
They have to give it all theway to charity, which there's
nothing wrong with that.
But most people want to becharitable and it's not, maybe,
100% charitable but even then,like, if they give it to charity
, like don't you want your kidsperhaps to be a steward of the
capital to make sure the charityis doing what you're coming to
us?
You know, haven SeniorInvestments to divest that asset
.
John Hauber (34:40):
And it's our job to really bring individuals into
the podcast like you, to helpthem defer those taxes on the
sale, defer those taxes on thesale and so.
But they're also thinking abouttheir legacy and whether or not
it's providing for family,giving generously or reinvesting
with purpose.
How do you address thoseemotional feelings of their
(35:04):
legacy?
Brett Swarts (35:05):
Absolutely.
We have a podcast too.
We have Capital Gains, axSolutions, and then we did about
200 plus episodes there and wejust launched our second one
about six months ago calledBuild it To Billions.
So you can give more, all of itaway.
I listened to your podcast, bro.
Thank you, john, it's great,it's awesome.
Thank you, yeah, appreciatethat.
And so we had the reallyfortunate opportunity to be in
(35:26):
rooms with people like DavidGreen from Hobby Lobby, right,
who felt, uh, um, not just feltand read about stewardship, but
really, like, studied it andstarted to practice it.
And so we say we want topractice a stewardship over
ownership mindset.
Let me bring this to life foryou.
Stewardship is like, hey, I'vebeen, you know the Lord is
(35:46):
blessed with these gifts, thistalent, this wealth, you know
all of these things.
To be a steward, to be ablessing for others, right, and
it's.
It's not, it's not in a, it'snot best for my nature and not
best for me to either hoard orkeep or like try to just
completely keep ownership ofthis, right.
In fact, we say stewardshipover ownership.
In fact, we we believe that youknow too much of the of just
(36:16):
the ownership can lead to what'scalled entitlement, right,
where we want to practice amindset of stewardship which
leads to gratitude, right, andso it's a slight shift and it's
actually a massive shift, but ittakes a slight shift every
single day to say, no, I'm asteward, I'm a steward, I'm a
steward.
So how David Green haspracticed this is he's literally
given his billion dollarcompany away to his children
while he's still alive.
Okay, this is so big, right,most of that thing, there's like
seven and he's, he's one of theseven, right, but he's
basically given the ownershipaway to like six others and they
(36:39):
sit on the board and they makedecisions together.
So, they, this is so big for,for everyone listening here.
Now we're going to have bebillion dollar companies per se,
but, like, how can we bestoring the, the not only the,
the wealth, the finances, butthe wealth of relationships, the
wealth of values, the wealth ofpracticing and building
business and enterprise to thenext generation so that they can
(37:02):
be a blessing and they cancompound it?
In fact, the sad part about itis about 70%, by the third
generation, have lost all of thewealth that the first
generation built, maybe from theground up, and it's, it's, it's
, it's a tragedy, right, and sowe're really focused on helping
our clients, our families thatwe serve, build what's called
family mission vision values.
If you don't have your familymission vision values, it's very
(37:24):
difficult to aim or need tokeep momentum moving towards
what the couple or the personwho made the wealth in the first
generation In fact, it's kindof like the constitution for how
and where to steward the wealth, steward the business, and so
that's what I would say.
If you haven't started FamilyMission Vision Values, that is
the action to take today.
All of the other stuff we'retalking about is mostly tactical
(37:45):
stuff, okay, but Family MissionVision Values is so key, so get
really clear on those.
And then, two, get really clearon what you want and what if
you're married, what your spousewants, what you guys want
together for the family.
Get very, very clear on that.
And then you ask yourself what'sin the way, what's stopping us
from doing those things, thatfor our family mission vision
values, for being good stewardsas well, as you know, for what
(38:06):
we really want this stage oflife.
So what are the obstacles?
And then find out if, forexample, the deferred sales,
trust plus or even the 1.0version could help you achieve
those, uh, you know the themission help you better achieve
your mission, vision, values foryour family, for your wealth,
and remove the obstacles that'sholding you back, you know,
would you move forward?
And that's basically theconversation we have with all of
(38:27):
the potential, uh, folks thatwe love to serve.
Um is is just clarifying whattheir dreams are, what their
goals are, finding out whattheir obstacles that are in the
way and then saying, hey, canour tool be a great fit for you?
And if it is, fantastic.
If it's not, we'll be the firstto say it.
But we have found over and overand over again it literally
transforms families.
They love the flexibility to bean entrepreneur or to be
(38:49):
passive or do a little bit ofboth, and to help them to
steward the capital in the nextgeneration by having what's kind
of like a we call it a dreamteam, like kind of like a mini
family office that's going tohelp with this substantial
amount of wealth.
So stewardship over ownershipis the mindset.
John Hauber (39:06):
Awesome, Brett, I love that and I actually
listened to that podcast episodeand really enlightening,
especially for the individualwho built Hobby Lobby.
It's great.
So what are the first stepsthat someone would take in
regards to reaching out to youor working with you or looking
at a DST strategy further?
Brett Swarts (39:32):
furthe.
Yeah, number one, I would say,you know pick up the book right,
Building a Capital Gains TaxExit Plan, and it's my journey
from, I guess, from zero to thekind of the knowledge I have now
.
I have a lot of top secrets inhere and we have a lot of our
strategic alliances in here aswell.
In fact, we have Tony Robbins,cpa, who's in here.
We have David Young, who helpedbuild PIMCO from 80 billion to
1.2 trillions on inner circle,and we talk about it here.
And then it's my journey fromMarcus and Millachap to
(39:52):
Cheesecake Factory to founder ofCapital Gains Tax.
So I think you're going toreally get a lot of good stuff
out of here.
Number two if you have a livedeal a million dollar net
proceeds, million dollar gain Iwant you to go to .
com.
com and I want you to schedule arequest, a free call, no cost
and obligation, an opportunityto meet with one of my team
members to see if this could bea good fit, and they'll walk
(40:13):
through just some generalquestions.
You know what's the potentialsales price of the asset, what's
the debt on the asset andwhat's the basis, and you know
what's kind of the tax liabilitythat you're working with there.
And then, what are you lookingto do with the wealth, post-sale
and with their time and yourenergy and let's see if it could
be a good fit.
And so that'scapitalgainstaxsolutionscom.
And then, if you want to followme on any of my social media
(40:35):
and follow my family adventureswe just got back from Uganda and
Guatemala for some missionstrips that we've been on you can
go to brettswartzcom and thathas my LinkedIn, my Facebook, my
Instagram and those kinds ofthings.
So those would be the topplaces to find us.
I'll leave one more.
We have the best 1031 exit planas well.
We just released, and thatgives the people the ability to
(40:56):
try for a 1031, because youmight say, hey, I wanna try for
1031.
Let's see if it can work outand if it doesn't, you can
default into our strategy.
Okay, this is really importantthat you're not stuck in a lane
because there's 1031 companiesthat to just keep you down the
1031 path, but we give you thatexit opportunity to go into the
deferred sales trust orsometimes we do a little bit of
both, okay.
So that's called the best 1031exit plan.
You can also find that atcapitalgainstaxsolutionscom.
John Hauber (41:20):
Brett, it has been a pleasure not only getting to
know you earlier, but having youon the show.
It's very timely that thisinformation is coming to the
forefront in the senior housingspace.
As you know, what's coming upis a huge wave of baby boomers.
They're looking to retire,they're looking to sell the
businesses that they've builtover many, many years and in the
(41:43):
senior housing space, we'rethere to help them and we're
here to bring resources such asyou to our podcast to educate
those that are transitioninginto a different life.
So thank you so much and hopeyou have a great day, Brett.
Thank you, John.
Truly passive income is to your freedom and
impact, as compounding interestis to your money, and so the
mindset here is to focus on howdo I become truly passive in my
income?
The big mistake most people makeis they think that the 1031
exchange is the only way to getthere, or even they think that
the opportunity zone soundsreally, really sexy on its front
(00:29):
end, in the sense that, hey,after 10 years I don't have any
tax right.
Well, people want truly passiveincome now.
They don't have to wait 10years for a project to be built,
or a project to cash flow itcan take three to five years to
cash flow, depending if they'rebuilding it from the ground up
and all of these differentthings to five years of cash
flow, depending if they'rebuilding it from the ground up
and all of these differentthings.
And so we have found that thosethat have already built the
massive wealth they want tounlock the harvest of that and
(00:52):
unlock what's called freedom andflexibility with their time,
their energy, their next venture, and that's where the Deferred
Sales Trust comes in.
John Hauber (01:04):
Welcome to the Senior Housing Investors Podcast
.
If you are an owner operator,investor, developer or buyer of
senior housing, you've come tothe right place.
The best way to stay connectedwith us is to sign up for our
weekly newsletter athavenseniorinvestments.
com.
This podcast doesn't existwithout you, our community.
(01:26):
Thank you for listening andreach out to us anytime.
Kelsie Heermans (01:36):
Welcome back everyone.
Imagine you dedicated yearsbuilding your business,
meticulously investing inBitcoin or strategically
acquiring real estate, achievingmillions in revenue.
Now picture the crushing blowof losing a substantial portion
of your hard-earned gains tocapital gains taxes upon exiting
(01:56):
.
But what if there was a betterway?
Today, we're exploringprecisely that a proven,
game-changing approach tocapital gains tax exit planning
that gives you the freedom andflexibility you crave, defers
your tax obligations, enhancesyour cash flow and, most
importantly, multiplies yourimpact for your family and your
most valuable people.
(02:17):
Joining us today is Brett Swarts, a recognized expert in capital
gains tax exit strategies andreal estate investing.
Brent has spent his careerstudying, refining and
implementing successful taxdeferral solutions and is now on
a mission to teach others howto leverage an innovative
proprietary strategy known asthe Deferred Sales Trust.
(02:39):
If you're looking to structureyour exit plan effectively
whether you're selling yourbusiness, bitcoin or real estate
, and want to reinvest passivelywith greater confidence and
control, you're in exactly theright place.
Stay tuned, as Brett sharespowerful insights and actionable
strategies you can apply rightaway.
(02:59):
Let's dive in, john.
John Hauber (03:02):
Thanks, Kelsie.
Brett.
Welcome to the show.
Let's dive in.
Great to be here.
Thanks for having us.
Yeah, many of our listeners arereal estate investors, as you
know, and some are operators.
Others are more passive andthey're either approaching an
exit or planning one down theroad.
The biggest concern, we hearcapital gains tax.
(03:23):
So let's start at the top.
What exactly is the deferredsales trust and how does it
differ from traditionalstrategies like a 1031 exchange
or opportunity zone investing?
Brett Swarts (03:36):
Yeah.
So most high net worthindividuals, when they go to
sell, they have a capital gainstax on some kind of asset,
whether it be a senior housing,a citizen living facility,
whether it be a business,whether it be Bitcoin or stock,
and so the gain is going to betaxed.
You're in Texas, so it doesn'thave any state, but you still
have that 20% federal and that3.8 Obamacare.
On most sales, that's about 24%of the gain.
(03:58):
So if you sell something for amillion dollar gain, well,
that's $240,000 of tax.
I take that by 10 million, likeyou're in California, well, you
can add another 13.3, so nowyou're at like 37, maybe up to
40 percent, with depreciationrecapture.
So we like to say that the bigproblem is people are facing
somewhere between 20 and 50percent of their gain being
crushed by capital gains tax.
(04:18):
So that's the big problem we'regoing to solve.
And so the question becomeswell, how can we solve it?
Solve it right, or what can wedo to mitigate or to defer or to
delay the tax in order tocompound the wealth?
And that's the first conceptthat I think we should focus on
is in most people actually wanttruly passive income right,
which is the ability to getcompletely passive and not have
(04:39):
to trade their time per dollarsanymore.
And so the first concept I wantto start, before we kind of go
into the tactical of what adeferred sales trust is, is that
this is this that truly passiveincome is to your freedom and
impact as compounding interestis to your money.
And so the mindset here is tofocus on how do I become truly
passive in my income?
(05:00):
The big mistake most peoplemake is they think that the 1031
exchange is the only way to getthere, or even they think that
the opportunity zone soundsreally, really sexy on its front
end in the sense that, hey,after 10 years I don't have any
tax right.
Well, people want truly passiveincome now.
They don't have to wait 10years for a project to be built
or a project to cash flow.
It could take three to fiveyears to cash flow, depending if
(05:22):
they're building it from theground up and all of these
different things.
And so we have found that thosethat have already built the
massive wealth you know and havemassive appreciation, they want
to unlock the harvest of thatand unlock what's called freedom
and flexibility with their time, their energy, their next
venture, and that's where thedeferred sales trust comes in,
(05:42):
and so the shift is making surethat you're very, very clear on
what you're solving for.
If you're just trying to, Ijust want to take care of this
tax problem and they startlooking at these different
strategies.
1031 exchange deferred salestrust.
Delaware statutory trust.
You know cost seg studies, youmay miss the point, you might be
, you know, climbing a ladder,but it's to the wrong wall and
you get to the top of the walland go I didn't really want this
(06:04):
, like I actually wanted thatother wall.
Well, you're climbing the wrongladder, and so what is a
deferred sales trust?
It's simply an installment salewith a trust.
However, the major benefits arefreedom, flexibility, tax
referral, liquidity,diversification, no like-kind
replacement requirement, no10-year hold requirement and,
(06:27):
ultimately, what our clientslove about it is it unlocks
truly passive income, which iswhat most people want these days
.
John Hauber (06:35):
That's really eye-opening, especially in the
senior housing space where youknow a timing of a 1031 isn't
always practical.
Right Deals are nuanced andreplacement properties can be
hard to align quickly.
And it's amazing how manyindividuals call me up and say
I've got 18 days to identifythree different properties.
Brett, can you walk us througha real life example where a
(06:59):
sales trust made a majordifference for a client exiting
a business or real estate deal?
Brett Swarts (07:06):
Yeah, we'll start business and then we'll go real
estate and then we'll go Bitcoin, okay.
So on the business front, wejust helped a client exit out of
their dental business dentalpractice business out of Oregon.
It was a $16 million exit ahusband and wife and they
started out as dentists and thenthey had their first practice
and then they compounded toabout six practices and they
sold it to a big group and sothey're facing 10% of the state
(07:30):
of Oregon and 20% federal, soabout 30%, okay, on the sale.
So if you look at that taxburden you just take, it's
pretty simple.
You take 16 million by 30% andyou're looking at the tax
liability of approximately $4.8million, right?
So you go on one front, I canpay 4.8 million in tax and have,
(07:51):
you know, 16 minus that, or Ican have the full 16 in this
trust that's owed to me overtime and that's just.
This is how this works.
So instead of selling it andtaking all of the cash all up
front, they sold it to the trustin exchange for a promissory
note.
So the trust issued them a note, right?
In other words, they became thebank to a trust.
This trust owes them the moneythey sold it to the trust and
(08:14):
the trust is gonna pay them back.
Now I think on this promissorynote we wrote it around 9% or
10%.
So the note is set and now it'sgonna pay them in installments
and they'll pay slowly over time.
So that's what happened and thetrust ultimately sold it to the
buyer.
So they get the same thing theybargained for.
But what happened here, john,is the trust bought and sold for
the same price and the trusthad no gain.
So this is how it works.
(08:35):
Right, it's really beautiful.
Now there's a third partyunrelated trustee.
That's our role here.
We're kind of like an IRAcompany, we're kind of like a
401k company, kind of like a lotof these things, but we're not.
We're none of those, but wehave some similarities.
So we perform the service of athird party early trustee.
So this trust is set up only todo business with this.
(08:59):
Husband and wife and theirchildren can step into their
shoes and keep it going for aslong as they want.
But most people will do thisfact pattern, john.
They'll let the full principlego in and they'll just live off
the interest.
So for this particular couple,you know it's you know $16
million and it's just using 9%interest rate, that's about
$1.44 million per year, orthat's about $120,000 per month.
(09:20):
Now, realize they've beenbuilding their business for the
last seven, eight, nine yearsblood, sweat and tears, all
their time and energy.
They've been building theirbusiness for the last seven,
eight, nine years blood, sweatand tears, all of their time and
energy.
They've been taking a fairsalary right, you know,
equitable salary to keep theirbusiness growing and you know,
and their employees andexpansion.
But at the same time, like this, changes their life, right, no
longer do they have to wait tohave the freedom and flexibility
(09:42):
with their wealth.
They, with investing taxreferral are now, with investing
in tax deferral, are now theunlock that truly passive income
, right, and so that's the firststory.
It's fantastic.
We've invested into passive realestate and mostly passive
private debt right now, which isso attractive, but we're also
putting stuff into multifamilydeals that have dropped in value
(10:02):
drastically.
We've put some into the stockmarket and we've put some into
money market accounts.
In other words, we diversifiedand we've dollar cost average.
And this is the beauty of thedeferred sales trust.
It's not just a tax deferral onthe capital gains tax, it's
also ability to invest atoptimal timing, which is really,
really cool, in a diversifiedway.
(10:23):
The second thing I'll leave withyou on this deal is they are
staying with their company for acouple of years.
In other words, they sold it tothe company but they're staying
on for two to three years towork with the company until they
probably fully exit out.
Okay, so they're still gonnaget paid salaries over the next
couple of years.
Well, guess what?
What's neat about the trust isthe trust can delay that
interest payment.
(10:43):
So, although it's set at 9% orabout 1.4 million a year, they
can say, hey, I want to delaythat, and therefore they're
delaying their income tax.
So for at least two years theydon't have, they don't take any
distribution from the trust.
So they have no state incometax, no federal income tax from
the trust.
Their working years they'llhave some tax right, which is a
(11:06):
part of it.
And then when they stop working, guess what?
We turn the trust on to startpaying them, right.
So you see how we can make thisthing an investment and not an
expense.
We can get an extra ROI therebecause they can kind of control
the.
You know, think of it like athrottle or a spigot of water.
Right, you can turn it on orturn it off in a flexible manner
(11:26):
based upon your unique you knowtax situation.
John Hauber (11:31):
So let's take that example that you just had on the
dentist and his wife.
So they go to you.
Okay, you basically do apromissory note with them 9%,
okay.
Once the property sells, thatmoney comes to you.
Is that correct?
It comes to the trust.
Brett Swarts (11:49):
Charles Schwab right, yeah, they have
third-party access.
They can see everything online.
Nothing moves without theirapproval, or their signature.
They become the creditor.
The trust is its own entity,not commingled in any other
trust or any other accounts.
It only does business with them.
But keep going.
John Hauber (12:05):
So they still retain control over their
investments.
Brett Swarts (12:08):
Is that correct?
They retain controls, so youprobably had some lenders lend
to you on some of your seniorhousing facilities.
Yes, john.
John Hauber (12:15):
Yes.
Brett Swarts (12:16):
So do they have control over the day-to-day or
control over the property?
No, not.
unless you don't pay the loanright, then they foreclose and
they take back full control.
Right, but they have controlsand protections in place.
So this is the biggest thingfor people.
Most entrepreneurs or investorsare used to having what's
called unilateral, 100%ownership control, although, if
(12:39):
you think about it, if they'reworking with banks, they still
have to, you know, be holding tothe banks.
Right, they have to send theincome and expenses statement.
They obviously pay on time,they need to get fire insurance,
they need to do all thesedifferent things to make sure
they're staying within the boxesof the lending requirements.
So the lender has controls, butthe owner of the real estate
has ownership.
Right, they're the day-to-day,so it's basically reversing it,
(13:01):
right?
So what they're doing isthey're giving up, like the
day-to-day management of thetrust in exchange for controls
and the ability to foreclose.
As a bank, however, nothingmoves without their approval of
their signature, right?
So that's important tounderstand.
So, really, what do you want toknow?
You want to know that the fundsaren't going to go somewhere
that you don't want them to go.
(13:21):
They're not going to beinvested in something that you
don't want to be invested in,that they're not going to be
paying, you know, only payingthe fees that have been agreed
upon, right?
So, like, you have all theaccess to see everything.
We have a third party taxpreparer that does all the P&Ls
and it's like a C Corp taxreturn and it has issues all of
the all of the tax documents,right?
So that's all of that piece ofit.
(13:42):
We also have a third party taxattorney CPA that provides a
lifetime audit defense, andthere's also another eyes and
ears A lot of times.
We have a third party financialadvisor that's working, you
know, like a Charles Schwab.
We have the third party trustee, so, like, we have all of these
third parties that are all, ina sense, kind of being the
checks and balances of thestructure and of the process and
(14:06):
of the movement of funds, andso all of that helps to create
the transparency and thecertainty of like, okay, I know
that I can trust this.
By the way, if they've ever done1031 exchange, guess what they
have given up control, right?
They just don't.
They're like, oh, for 45 to 180days, right?
Yeah, the challenge of the 1031exchange companies.
(14:27):
You could be very careful aboutthis right, a lot of them.
They co-mingle the funds andit's dangerous right.
So they have all these fundscoming in from these different
exchanges and they put it all ina one big pile.
And even then some of thesecompanies the ones that aren't
doing what they should be doingthey go, you know, landed or get
arbitrage on it, and thensomething happens and then
they're not able to use theexchanges.
Like this is a very, you know,serious thing, and like people
(14:48):
take that for granted that whenyou give up controls for a 1031
exchange, whereas the deferredsales trust is never commingled,
nothing moves after approval ofyour signature.
It's its own entity, its ownaccounts.
So those are how we keep theprotections there, john.
John Hauber (15:04):
So, as you know, control is everything for high
net worth individuals in manycases.
So let's talk about who thisstrategy is really built for.
Brett Swarts (15:15):
Yeah.
So it's built for thepurpose-driven entrepreneur
right, the ones who want toactually control the timing of
their investments.
They want leverage over thenegotiations.
They don't ever want to feeltrapped by that 1031 exchange.
They actually want to startthat new business venture, that
new opportunity.
And here's how we do it.
And this is the best kept secret.
In fact, the biggest myth withthe deferred sales trust is that
(15:36):
, oh man, I got to give them allthis control.
I got to be completely passive.
Now, that's certainly an option.
People want the truly passiveincome and that's that's, let's
say, 50% of our clients that arein that.
Let's say that 65 and above ageand they're really ready to
harvest and be completely kindof done with the day to day.
And I would say our otherclients between the 40 years old
(15:56):
to about 65, they're actuallystill in the game or wanna be in
the game in the sense of beingactive.
And this is what's so, so neatabout this.
In fact, this is the singlebest reason why I started this
company is because I am thatentrepreneur.
I grew up in real estate.
I grew up building real estatewith my parents.
I grew up at Marcus andMillichap, understanding how to
structure and buy investmentreal estate properties.
Multifamily was my specialty.
(16:17):
I grew up doing 1031 exchange.
In fact, it was all reallyreally good, john, until the
crash of 08.
And I'll never forget theclients who were forced into
these 1031 exchanges and theywere having all of the controls
with that one box type ofstrategy.
Now lost everything right, andthe reason they lost everything
(16:37):
is because they had too muchdebt, non-luck liquidity or
diversification and all of asudden they had a debt problem.
The banks were no longerwilling to negotiate, they were
calling loans and it was a messright.
In fact, we're seeing the samething happen today.
People overpay for properties.
About two and a half years ago,interest rates have expired in
the sense of the fixed part ofit.
Now they've adjusted to doublethe rate and the debt is sinking
(17:01):
the ship right.
And the biggest culprit of thatis the enemy of this, which is
what your broker doesn't wantyou to know.
They want to keep you in this1031 exchange.
Now, do they really want to dothat?
Well, they don't know anythingelse.
A lot of them don't knowanything else, or some of them
don't know anything else, orsome of them don't really want
to know, or the exchangecompanies don't want you to know
about this.
And so here's what we do withthe deferred sales trust, and
I'll kind of move to the realestate opportunity now to give
you an idea for this.
Okay, so we had a client in fact, they've done six exits with us
(17:24):
now but they're a multifamilysyndication expert and they have
over 3000 multifamily units andtalk about someone who wants to
continue to build their wealthby themselves.
Well, why would they use thedeferred sales trust?
Well, here's why.
In fact, his name is David.
You can hear his whole story onmy YouTube channel.
So David was selling thesemultifamily properties and the
first one we sold was about a$20 million deal in Las Vegas
(17:48):
and they had massive gains on it.
But what they were finding wasthey were not doing 1031
exchanges for a number ofreasons, a lot of them because
some of their investors justwanted to get some of their
money back and it was kind ofjust complicated.
So every syndication, theywould just pay tax and pay tax,
pay tax.
And so they said you know what,Brett, can we just take our GP
position and can we move intothe deferred sales trust?
So David and his businesspartner, jordan each set up.
(18:09):
We set up trust for each ofthem and each of their GP
positions went into the trustand they went on to do this.
Jordan five times, david, sixtimes across $120 million of
multifamily properties.
Here's the key.
They said Brett, I wanna makesure that we can go back into
our own deals.
Can we do that?
Yes.
Can we go back into a realestate fund?
Yes.
Can we go into a lending?
(18:29):
Yes.
Can we go into money marketaccounts?
Yes, most Can we go into moneymarket accounts yes, most of
these guys are not really bigstock market guys, but can we do
that?
Yes, you can do all of thosethings.
In fact, you can joint venturepartner with the trust.
This is so key, david, right,and this is what they did.
They joint venture partner withthe trust and the trust put up
the money and they went rightback and do their syndication
deal right, and this is the bestpart of the a new depreciation
(18:51):
schedule on that LLC, which isreally really important, versus
the 1031 that has the olddepreciation schedule.
Okay, so we call this having atax flow mindset and not just a
cash flow mindset, and themistake is thinking that the
1031 exchange is your end all beall, and it's not because you
have an old depreciationschedule.
The second part of it is themarket started to shift right
(19:14):
and so they were dollar costaveraging with the investments
and they weren't also overlyputting all of the investments
all in one place.
They kept some liquidity.
The liquidity now is helpingthem a lot given the
circumstances that we're in.
And so you don't have to, youknow, play all of your chips all
into one thing.
You can be that entrepreneur todo your own deals.
(19:35):
You can also diversify.
You can joint venture partnerwith the trust and you be the
managing member of a new LLC andyou can go start that business.
You can also develop realestate.
Okay, we had a client who solda $3 million business, deferred
all the tax, and he used it tobuild multifamily from the
ground up in Tennessee.
This is huge right and an old1031,.
(19:56):
First of all, you cannot 1031 abusiness.
Second of all, even if youcould 1031 a business, you can't
put it into unlike kind realestate right.
In this scenario that's out thewindow.
With the DST we can defer thetax on the sale of the business,
joint venture partner with thetrust and then build the real
estate from the ground up andjoint venture, partner with the
(20:18):
trust and then build the realestate from the ground up.
And the last one I'll leave withyou is the Bitcoin right I
promised okay, client boughtBitcoin for $50,000 and it went
to $50 million.
Okay, she worked for Google,used to okay, saw Bitcoin at
early adoption and just startedto pour money into it.
Okay, obviously, it went to themoon for her to it.
Okay, obviously, it wentthrough to the moon for her.
(20:39):
And at 54,000 a coin, we exitedfive of that 50 million and we
deferred about a 1.85 million totax.
Okay, no, having to move toPuerto Rico, not having to do
any charity or life insurance orgifting Now.
So now she's in a deferralstate.
Now watch this uh, john, the the54,000 goes up to about 68,000,
okay, and then what happens?
It crashes down to about 15,000.
So that 5 million that weexited at 54,000 was really key
(21:04):
because it was used to start aonline Khan Academy, a like Khan
Academy type of thing, right,where she's educating youth,
something she's very passionateabout.
I gave her freedom to pursueher dreams, to make a difference
for the people that she feltcalled to serve.
Fast forward Bitcoin's about90,000 a coin, or 85 right now.
She held on to the other all ofthat other 45 million, or, you
(21:24):
know, it dropped all the way,probably, like I don't know, 15
million.
Then it went over over ahundred million, right?
So this is the ability of thetrust.
It's so great.
You can sell high and sheactually, you know, if she
wanted to, we could have boughtBitcoin within the trust at
15,000 a coin and write it allthe way back up Like it's
literally the Netflix to the oldBlockbuster, john, right, like
the Blockbuster is 1031 exchange.
(21:46):
What we have is the Netflix,because it just gives so much
more flexibility than anythingelse out there.
John Hauber (21:51):
So, Brett, I got it .
I understand it.
Now, many of our audiencemembers are either selling
stabilized senior housing assetsor exiting after years of
ownership, so naturally, thequestion of legality and IRS
scrutiny comes up.
Can you explain that?
Brett Swarts (22:09):
Absolutely.
That's the most importantquestion.
In fact, there's three thingsthere's legality, there's
controls, which you've alreadytouched on, and then there's
fees.
Okay, so we'll start withlegality.
So the deferred sales trust isthe most vetted capital gains
tax referral that typically youor your CPA has never heard of
until you hear us on like apodcast or you check out our
book.
Okay, all right, it's basedupon IRC 453.
(22:33):
Here's the good news, john youhave heard about IRC 453.
I mean, in fact, you know aboutit as a seller.
Carry back, for example, if Johnhas a Texas senior housing
facility worth $20 million and,for example, if he owns it free
and clear, and, for example, ifhis depreciation is fully
depreciated, he has zero basis.
Just keep it real simple.
Well, john can find Steve downthe street and Steve could give
(22:53):
a $5 million down payment andJohn could carry a note for $15
million.
It's something that's verycommon and not as common for a
number of reasons, mainlybecause now all of John's
capital is tied to that oldasset and he has other
properties, he wants to buildother places, he wants to invest
, but he makes the deal becauseyou know the bank's interest
rates are, you know, 6%, 7%, andthe other guy would have paid,
(23:15):
you know, 18 or 17 million forit.
So he takes 20 because he cancarry the note.
But guess what happens?
The guy buys the property,doesn't know how to run it, and
one or two years later he'srenegotiating anyways or missing
payments, which forces John todo what?
Pay or foreclose on him to takethe property back, you know,
build it back up again, and nowhe's just you know, he's, you
(23:36):
know, or write the note down atthe loss, like this is the whole
problem with the traditional453 installment sale.
However, that that installmentsale goes back over 100 years
like this is tried and true taxlaw.
In fact, the same form, john,that we reported installment
sale on, if you were to do thatregular installment, is the same
form that we report the DSTinstallment sale.
So think of us like a structuredinstallment sale, right, or a
(23:59):
specialized installment sale.
So that's the first thing tounderstand.
Now let's talk about trackrecord.
Okay, thousands and thousandsand thousands of transactions
now, over a close to 30 yeartrack record and billions and
billions and billions of assetssold using it.
Okay, across all the states andabout every asset you could
think of public stock, privatestock real estate dentists,
(24:21):
optometrists a big point primaryluxury real estate, you know,
apartment buildings, car washes.
We just did a billboard sale inCalifornia for 17 million.
We just did an $8 millionautomotive sale up in
Massachusetts.
We just did a $17 million landsale in Texas.
I mean we can go on and on andon about all the deals that are
(24:41):
closing, and so that's reallyimportant to understand that
this isn't something we're justtrying for the first time.
Hey, john, let's test thisthing if it works out for you.
No, this has already beenproven.
We've already proven thestrategy, the structure.
In fact we've been tested about30 times with the IRS, state
and federal audits, promoteraudits.
We've had no changes, nofindings on any of them.
So we're batting a thousand sofar, legally speaking, through
(25:03):
the IRS audits Very important,okay.
The tax attorneys my businesspartner who are the ones that
deal with the lifetime auditdefense really important, that's
included into it.
So the track record is reallyperfect.
I'll leave another story here tokeep kind of bringing this home
.
Okay, because a lot of peoplethey'll go to their CPA and
they'll say oh, mr CPA, I heardthis podcast, would you listen
to it?
This deferred sales trust,First of all, their CPA
(25:26):
typically gets confused withwhat's called a Delaware
statutory trust Notice thatthey're both DSTs and all of a
sudden that they're like well,it doesn't work for your
business sale, or you knowDelaware's, or you know and
we'll talk.
We can talk about pros and consand, if you like, in a minute,
but they get it confused andthen, and then the moment they
go, it's not that.
Then they go wait, I haven'theard of that.
What is that?
And the problem, the challenge,becomes John, if you he's been
(25:48):
there for your family and youhave this connection with him,
you would think that if you havean ACL surgery, he'd at least
hear about that unique way thatthat ACL surgeon does it.
In fact, I played basketball incollege.
I had two ACL surgeries.
I signed my scholarship and twoweeks later I blew my knee out.
(26:12):
It was devastating, right, andI'll never forget that.
That, that uh, that doctorgiving me that knee test.
And you're in a state wherethey grab the knee and they kind
of pull it up and down and he'slike you're okay, you're good,
you know, don't worry about it,you'll be back in two weeks.
And I was like thrilled Cause Ijust signed that scholarship
and I'm all excited.
I'm said, hey, Brett, get an MRIjust in case, because this
(26:34):
whole knee test the doctorscannot see the inside of the
knee.
You need to get that.
I've heard horror stories ofpeople who came back too early,
blew their knee out and they'redone for the rest of their
career.
So I go back to the doctor andsay, mr Doctor, can I please get
an MRI?
I know it's probably fine.
He's just, you know, really Ithink, kind of upset that I'm
not trusting him.
(26:56):
But I'm just kind of like beingcautious.
So I I kind of sheepishly walkout of there with with the
referral and you know, get inthe car and drive.
You know you're going to drive45 minutes to downtown and this
is in California and you'regoing to.
You know, oh, hey, doctor,how's it going?
(27:18):
Yeah, I got your MRI back.
I'm like all right, how'd it go?
You know I'm expecting to sayall clear, you have a completely
ruptured ACL, you needreconstructive surgery, okay,
and it was like the moment'sdead still and all of the all of
the like, emotion and all ofthe frustration and all of the
like.
Just, you know, I wascompletely shocked too because I
(27:39):
wanted to believe him right.
And so the point of this is toooften we look at that family
practitioner as the specialist.
But when you have a five, ten,fifty, a hundred million dollar
exit and they've never done thesurgery before and they never
heard of it, but when you have afive, 10, 50, $100 million exit
and they've never done thesurgery before and they never
(28:01):
heard of it, you have to.
The mistake is relying on theirexpertise for something they've
never done.
Okay, now here's the reality.
If you bring them to the callwith us and we sit down, we have
the discussions and we explainthe tax law and we walk through
the track record and we showthem how it works and they sign
the NDAs Nine out of 10 join us.
In fact, they send us all oftheir clients and they're
thrilled to see that someone hasactually figured this out.
In fact, the creator of this isa CPA.
(28:22):
He is a tax attorney, he's adual CPA, tax attorney.
He's a genius.
He figured this out.
Okay and Okay.
And I'm the, I'm the guide orthe person who helps to educate
on the front end.
I'm kind of like the nurse.
Okay, and we work on aconditional basis, and so I say
that because the legality pieceis really important, but I want
to make sure people don't makethe mistake of putting too much
on their CPA what the specialistCPA and tax attorney can
(28:46):
provide.
That's the legal part.
We also have, you know,national law firms, third-party
CPAs, big-time financialadvisors they all work with us.
We are an all-in-one network.
One of them helped build PIMCOfrom $80 billion to $1.2
trillion.
He and his legal team did atwo-year due diligence and
they're a part of our innercircle.
(29:07):
They manage some of the biggestwealth in the world, so their
name's a part of it.
I mean, we have so manyresources for the legal part.
Okay, so let's assume that it'slegal.
That's number one.
Any questions on the legal partbefore we move to the next two
objections?
No, I think you covered that,brett.
Thank you, okay.
So the second one is thecontrols.
Right, so I'm third partytrustee, right, so you do have
to give up some control, right,but you have protections in
(29:29):
place.
So that's just part of the partof the.
I guess you could say thedownside.
Right, so we've talked aboutthat, but we work together as a
team.
I really love working withpeople like john like you, john
who are experts in their fieldand experts in senior housing,
multifamily or mobile home park.
These are our favorite placesto invest.
In fact, I personally invest insenior housing and memory care
(29:49):
care and independent living aswell.
I grew up my mom was an LVN andso we would go to convalescent
homes and senior housing placeswhere she'd be working, and I
was the young kid who came afterschool and I would, I would
talk, I would she'd have me cometalk with the people in the in
the housing there, right, someof them were, some of them were
the actual, like theconvalescent homes, right, so,
(30:11):
right.
So I have a big heart forsenior housing, a big heart for
real estate, a big heart forserving in a way where you're
connecting housing andhealthcare in a way, right, and
so we really want to be an assetto your team, right, to help
you make great real estateinvestment decisions.
In fact, our unique advantage iswe consider ourselves real
(30:32):
estate investment advisors Likea financial advisor is to your
you know, stock bonds, mutualfunds although we can hire those
for the trust A lot of ourentrepreneurial clients, real
estate clients.
They preferred real estatewhere they made their money.
Now they prefer, at this point,passive real estate, for most
of them, right.
And so we help to build outthese, these plans and these,
these allocations, based upontheir risk tolerance, based upon
(30:52):
their certainty of convictionfor different parts of the food
group of the commercial realestate world.
And so that's part two, that'sthe controls piece.
The last part is fees.
Okay, so the fees have to makesense, they have to win for you,
the client, and so we work on arecurring fee basis as a
(31:12):
trustee, okay, so one of thefirst fees is that when the
funds come into our trusteeship,we get a recurring fee and it's
somewhere around one and a halfto 2% of that AUM.
So for every million, it'sabout 15 to 20,000 on a yearly
basis.
Now, this can include afinancial advisor, if we have
one, right.
But no matter how and where youinvest the funds, it's about
(31:33):
one and a half to 2%.
You have some breaks as you goup, you know.
So keep that in mind, dependingon the dollar volume.
So that's the recurring fee forthe trustee work.
Now we write our notes again at.
You know, eight, nine, 10%.
We can typically netcompounding eight, nine, 10%,
net of our fees.
Okay, so we cash flow, our fees.
So this is a way to reallyalign.
(31:54):
We typically can double andtriple people's cash on cash
return and then free up theirtime and their energy.
The other fee is the one-timelegal fee based upon the gross
sales price.
And so if it was a milliondollar exit, it'd be about
$15,000, okay On the firstmillion.
If it was a two million exit,it $15,000.
Okay on the first million.
(32:14):
If it was a 2 million exit,it'd be 15,000 on that first
million, 1.25 on anything abovethe million.
Our minimum is a million dollarnet proceeds, million dollar
gain.
So these are for larger exits.
The last thing I'll say is thatwe can eliminate the estate tax.
So for anyone who's listeningand they say, Brett, I have a
net worth, I'm married, it'sgreater than 28 million or 14
million.
Single, you have what's calleda death tax challenge.
(32:34):
Here's the reality.
We've been taught that the 1031exchange is the best because
you can swap until you drop andget a stepped up basis.
Right, I'm tax-free.
Hold on a second.
You're not tax-free.
Your capital gains tax-free, atleast your kids are.
But you're not estate tax-free.
In fact, if you've seen the showYellowstone, that's the entire
show Kevin Costner has the landand Beth, the daughter's like
(32:57):
dad, you got to sell the land.
And he's like I'm never goingto sell.
He's like but if you don't sellthat and you die, the debt tax
is going to force the saleanyways.
And Kevin's like I'm notselling.
And so this is the entirepremise of the entire show.
And so what we say is we go,kevin, kevin, use a DST plus,
sell the land and get thewhatever it's worth 200 million
(33:19):
or a hundred million or abillion dollars out of your
taxable estate.
And one day before you die, andall of that, now you had to
sell the land, you had to sellthe property, but now all of
that equity is outside thetaxable estate.
No charity, life insurance orgifting required.
This is so powerful, okay, Idon't want anyone to miss this,
(33:40):
and your legacies, your children, can be the beneficiaries of
this trust, and all of thegrowth between the time we do
that sale and the time you passaway is forever outside your
taxable estate.
This is so huge, okay, becauseso many people have not done the
planning, proper planning, orthey have to buy a bunch of life
(34:00):
insurance that's reallyexpensive.
They have to give it all theway to charity, which there's
nothing wrong with that.
But most people want to becharitable and it's not, maybe,
100% charitable but even then,like, if they give it to charity
, like don't you want your kidsperhaps to be a steward of the
capital to make sure the charityis doing what you're coming to
us?
You know, haven SeniorInvestments to divest that asset
.
John Hauber (34:40):
And it's our job to really bring individuals into
the podcast like you, to helpthem defer those taxes on the
sale, defer those taxes on thesale and so.
But they're also thinking abouttheir legacy and whether or not
it's providing for family,giving generously or reinvesting
with purpose.
How do you address thoseemotional feelings of their
(35:04):
legacy?
Brett Swarts (35:05):
Absolutely.
We have a podcast too.
We have Capital Gains, axSolutions, and then we did about
200 plus episodes there and wejust launched our second one
about six months ago calledBuild it To Billions.
So you can give more, all of itaway.
I listened to your podcast, bro.
Thank you, john, it's great,it's awesome.
Thank you, yeah, appreciatethat.
And so we had the reallyfortunate opportunity to be in
(35:26):
rooms with people like DavidGreen from Hobby Lobby, right,
who felt, uh, um, not just feltand read about stewardship, but
really, like, studied it andstarted to practice it.
And so we say we want topractice a stewardship over
ownership mindset.
Let me bring this to life foryou.
Stewardship is like, hey, I'vebeen, you know the Lord is
(35:46):
blessed with these gifts, thistalent, this wealth, you know
all of these things.
To be a steward, to be ablessing for others, right, and
it's.
It's not, it's not in a, it'snot best for my nature and not
best for me to either hoard orkeep or like try to just
completely keep ownership ofthis, right.
In fact, we say stewardshipover ownership.
In fact, we we believe that youknow too much of the of just
(36:16):
the ownership can lead to what'scalled entitlement, right,
where we want to practice amindset of stewardship which
leads to gratitude, right, andso it's a slight shift and it's
actually a massive shift, but ittakes a slight shift every
single day to say, no, I'm asteward, I'm a steward, I'm a
steward.
So how David Green haspracticed this is he's literally
given his billion dollarcompany away to his children
while he's still alive.
Okay, this is so big, right,most of that thing, there's like
seven and he's, he's one of theseven, right, but he's
basically given the ownershipaway to like six others and they
(36:39):
sit on the board and they makedecisions together.
So, they, this is so big for,for everyone listening here.
Now we're going to have bebillion dollar companies per se,
but, like, how can we bestoring the, the not only the,
the wealth, the finances, butthe wealth of relationships, the
wealth of values, the wealth ofpracticing and building
business and enterprise to thenext generation so that they can
(37:02):
be a blessing and they cancompound it?
In fact, the sad part about itis about 70%, by the third
generation, have lost all of thewealth that the first
generation built, maybe from theground up, and it's, it's, it's
, it's a tragedy, right, and sowe're really focused on helping
our clients, our families thatwe serve, build what's called
family mission vision values.
If you don't have your familymission vision values, it's very
(37:24):
difficult to aim or need tokeep momentum moving towards
what the couple or the personwho made the wealth in the first
generation In fact, it's kindof like the constitution for how
and where to steward the wealth, steward the business, and so
that's what I would say.
If you haven't started FamilyMission Vision Values, that is
the action to take today.
All of the other stuff we'retalking about is mostly tactical
(37:45):
stuff, okay, but Family MissionVision Values is so key, so get
really clear on those.
And then, two, get really clearon what you want and what if
you're married, what your spousewants, what you guys want
together for the family.
Get very, very clear on that.
And then you ask yourself what'sin the way, what's stopping us
from doing those things, thatfor our family mission vision
values, for being good stewardsas well, as you know, for what
(38:06):
we really want this stage oflife.
So what are the obstacles?
And then find out if, forexample, the deferred sales,
trust plus or even the 1.0version could help you achieve
those, uh, you know the themission help you better achieve
your mission, vision, values foryour family, for your wealth,
and remove the obstacles that'sholding you back, you know,
would you move forward?
And that's basically theconversation we have with all of
(38:27):
the potential, uh, folks thatwe love to serve.
Um is is just clarifying whattheir dreams are, what their
goals are, finding out whattheir obstacles that are in the
way and then saying, hey, canour tool be a great fit for you?
And if it is, fantastic.
If it's not, we'll be the firstto say it.
But we have found over and overand over again it literally
transforms families.
They love the flexibility to bean entrepreneur or to be
(38:49):
passive or do a little bit ofboth, and to help them to
steward the capital in the nextgeneration by having what's kind
of like a we call it a dreamteam, like kind of like a mini
family office that's going tohelp with this substantial
amount of wealth.
So stewardship over ownershipis the mindset.
John Hauber (39:06):
Awesome, Brett, I love that and I actually
listened to that podcast episodeand really enlightening,
especially for the individualwho built Hobby Lobby.
It's great.
So what are the first stepsthat someone would take in
regards to reaching out to youor working with you or looking
at a DST strategy further?
Brett Swarts (39:32):
furthe.
Yeah, number one, I would say,you know pick up the book right,
Building a Capital Gains TaxExit Plan, and it's my journey
from, I guess, from zero to thekind of the knowledge I have now
.
I have a lot of top secrets inhere and we have a lot of our
strategic alliances in here aswell.
In fact, we have Tony Robbins,cpa, who's in here.
We have David Young, who helpedbuild PIMCO from 80 billion to
1.2 trillions on inner circle,and we talk about it here.
And then it's my journey fromMarcus and Millachap to
(39:52):
Cheesecake Factory to founder ofCapital Gains Tax.
So I think you're going toreally get a lot of good stuff
out of here.
Number two if you have a livedeal a million dollar net
proceeds, million dollar gain Iwant you to go to .
com.
com and I want you to schedule arequest, a free call, no cost
and obligation, an opportunityto meet with one of my team
members to see if this could bea good fit, and they'll walk
(40:13):
through just some generalquestions.
You know what's the potentialsales price of the asset, what's
the debt on the asset andwhat's the basis, and you know
what's kind of the tax liabilitythat you're working with there.
And then, what are you lookingto do with the wealth, post-sale
and with their time and yourenergy and let's see if it could
be a good fit.
And so that'scapitalgainstaxsolutionscom.
And then, if you want to followme on any of my social media
(40:35):
and follow my family adventureswe just got back from Uganda and
Guatemala for some missionstrips that we've been on you can
go to brettswartzcom and thathas my LinkedIn, my Facebook, my
Instagram and those kinds ofthings.
So those would be the topplaces to find us.
I'll leave one more.
We have the best 1031 exit planas well.
We just released, and thatgives the people the ability to
(40:56):
try for a 1031, because youmight say, hey, I wanna try for
1031.
Let's see if it can work outand if it doesn't, you can
default into our strategy.
Okay, this is really importantthat you're not stuck in a lane
because there's 1031 companiesthat to just keep you down the
1031 path, but we give you thatexit opportunity to go into the
deferred sales trust orsometimes we do a little bit of
both, okay.
So that's called the best 1031exit plan.
You can also find that atcapitalgainstaxsolutionscom.
John Hauber (41:20):
Brett, it has been a pleasure not only getting to
know you earlier, but having youon the show.
It's very timely that thisinformation is coming to the
forefront in the senior housingspace.
As you know, what's coming upis a huge wave of baby boomers.
They're looking to retire,they're looking to sell the
businesses that they've builtover many, many years and in the
(41:43):
senior housing space, we'rethere to help them and we're
here to bring resources such asyou to our podcast to educate
those that are transitioninginto a different life.
So thank you so much and hopeyou have a great day, Brett.
Thank you, John.
Popular Podcasts
Bookmarked by Reese's Book Club
Welcome to Bookmarked by Reese’s Book Club — the podcast where great stories, bold women, and irresistible conversations collide! Hosted by award-winning journalist Danielle Robay, each week new episodes balance thoughtful literary insight with the fervor of buzzy book trends, pop culture and more. Bookmarked brings together celebrities, tastemakers, influencers and authors from Reese's Book Club and beyond to share stories that transcend the page. Pull up a chair. You’re not just listening — you’re part of the conversation.
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com