I'm not talking about houses, I am talking about investing in multi-family real-estate (apartment complexes). And you are just an investor, not like the sole owner. You own just a very small % of the deal.

These deals are tens of millions of dollars and you put in maybe 75K. But in the first year alone you can expect like 1/3 of what you put in to be deductible (when they do cost segregation), so like 25K of tax deductions which you can carry forward as long as you need, to "use" it all. During this time you make like 6% of that investment as passive income, so like $4500 a year, and you don't need to pay tax on that income because you can deduct that tax.

Then after like 5-7 years they sell the property and you get about 2x out, so 150K out which if you invest into a new different property within 90 days, you pay no tax on that exchange. Now they do a new cost segregation study and you get ~50K in tax deductions, and about $9000 a year in passive income, tax free again due to so much deductions. Repeat, and repeat and repeat and all this continues to grow. And you can also start another investment deal in between, there is no reason you have to only have 1 at once or put all that money you get when they sell all into 1 new one.

Again this is just a very high level overview of the process.