Q AND A ON DEFERRED SALES TRUST COULD EXCEL AND HELP PEOPLE

[Brett P Swarts]

Scott Bower:

How did you really find that this was an area where you could excel at and help people?

Brett Swarts:

Yeah, so my story starts in the Real Estate game at Marcus and Millichap, a Real Estate Investment Firm in Northern California, where I was a Commercial Real Estate Broker helping people buy and sell mainly multifamily apartments here in the Sacramento Area. It was 2006 and things were going really well, you know, it was kind of reminds me of a pre-COVID, prices were high, rents were growing, everything was doing very, very good. Then all of a sudden, something happened. The crash, but even before that, I was brand new to the game, and I was just trying to survive in the business. You know, I was newly married, I had a daughter at home. And I was, you know, as commercial real estate broker, you either sink or swim, either you make a big check, or you make zero, there's no salary, there are no benefits. But I love the business. I was just trying to make it. And I was making a little bit and I was getting going, I don't know, if you've ever been so scared Scott, where you barely made any money, you're not sure how to support your family. But that's where I was, it wasn't always easy. You know, it was a struggle. People are telling me to go get a real job, what are you doing? And I just started to get some momentum going in the business and then 2008 hit. Then it really became like, “oh my gosh, do you love this business or are you going to go, get a real job, as long as a lot of my friends would say, right? And I said, you know, I love the business, I'm gonna figure out a way to do it.”

So I do it, every good entrepreneur does. I actually got a side job at a restaurant Cheesecake Factory serving cheesecake nights. And by days, I mean, I would call and help owners get out of or figure out a way to lower their tax rate based upon new property values from things that just completely hit the wall, help them negotiate with banks, help them get concessions with the rents with their renters, help them do anything they can to keep them going. Because not only was I going through the struggle financially, but they were going through something that was very stressful to they were losing half of their wealth, some of them lost everything during this crash. So we try to figure out how do we add value to clients? And how do we help them escape feeling trapped by capital gains tax? And what we found out as we did our research was people had done 1031 exchanges and had overpaid for properties, right, they had sold high and bought higher 180 days later, and they take on the massive amount of debt. And then when the music stopped, they were left with values that were lower than what they owed for some of them or are close to it or cash flow that was an unpredictable right with people losing their jobs. And so they were losing everything. So we said there's got to be a better way. And if you've ever had someone come into your life that teaches you something that opens up a whole another Buddy call, a blue ocean opportunity. But that's exactly what happened to me, my manager at Marcus, the military at the time, brought in a gentleman. This is about 2009 to speak on what's called the Deferred Sales Trust. At that point, we understood that now we can help people escape the capital gains tax to 1031 exchange forever, so they never have to feel forced to overpay for a property never have to face having to take on too much debt.

So the plan was this, I was gonna roll it out to my clients, I was going to grow my business. I was going to help a lot of people and become like, you know, the top broker at doing this. So that's what I started to do, I started to roll it out, my business started to grow. My value started to grow because I was giving them something that no one else had and to liken this to blockbuster versus Netflix, the blockbusters like the old 1031 exchange, all right, very restrictive 45 days to identify 180 days to close, equal or greater value have to stay in the same asset class type, right? I love commercial real estate, but I also love it when the prices are more of a buyers’ market, which we think we're going to move into. Well, that's the old way of doing things. The new way is the Deferred Sales Trust. It's like Netflix, right? You can buy whatever you want to, you can be passive or active. You can put it into multiple asset types, you can put in stocks, bonds, mutual funds, or real estate or a new business venture or developing real estate. You don't have to do equal or greater value. You don't have to take on any debt if you don't want to. You get a brand new depreciation schedule. As soon as I understood that everything changed. Fast Forward, five kids now, my wife and I were able to be full-time. First was commercial real estate broker then we transition to training brokers, training financial advisors, training commercial estate operators, luxury realtors on how to use this strategy so they can grow their business and or if you're the client listening to this so that you can escape feeling trapped by capital gains tax.

You have just listened to another information-packed episode of capital gains tax solutions with Brett Swarts. We hope you enjoyed today's show and found it helpful. Visit to access the show notes and to access more resources. Don't forget to leave a Review and join us again next time.

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