In this episode of the Be Wealthy Podcast, Brett Tanner sits down with Michael Velasco, founder of Exchangeable, for a deep dive into the powerful world of 1031 Exchanges and how savvy investors use them to grow wealth while legally minimizing taxes.
Michael shares his 20+ year journey through real estate, accounting, and tax strategy, showing how every step of his career prepared him to become a leading expert in 1031 exchanges. Together, Brett and Michael break down the fundamentals of exchanges, common mistakes investors make, and the advanced strategies high-net-worth individuals use to protect and multiply their portfolios.
This episode blends real-world investing strategy, tax education, mentorship, and long-term wealth thinking—making it essential listening for any serious real estate investor.
🔑 TOP TAKEAWAYS- Taxes don’t destroy wealth—poor strategy does.
With the right tools, investors can defer taxes and keep more capital compounding.
- Timing is everything in a 1031 exchange.
Miss the 45-day or 180-day deadline and the entire exchange can fail.
- Reverse exchanges create opportunity in competitive markets.
Buying first gives investors the upper hand when inventory is tight.
- You must reinvest all proceeds to fully defer taxes.
Any leftover cash becomes taxable “boot.”
- Any investment property can be exchanged for another.
Residential, commercial, or land can all qualify when structured correctly.
- Execution matters more than intention.
Even great investment plans fail without proper structure and guidance.
- Mentorship shortens the learning curve.
Learning from experts helps investors avoid costly mistakes.
- Education is a wealth multiplier.
The more you understand tax strategy and investing, the faster you grow.
- Wealth is built through reinvestment, not consumption.
Capital must keep moving into productive assets to grow.
- Long-term thinking always wins.
The biggest rewards go to those who play the long game, not the quick win.
⏱️ TIMESTAMPS00:00 – Welcome to the Be Wealthy Podcast & Introduction to 1031 Exchanges
01:15 – Meet Michael Velasco: 20+ Years in Real Estate
03:00 – The REO and Short Sale Market During the Crash
05:30 – Why Michael Left Traditional Real Estate for Tax Strategy
07:15 – Discovering the Power of 1031 Exchanges
09:30 – What a 1031 Exchange Really Is (Simple Breakdown)
12:00 – The 45-Day Identification Rule Explained
14:45 – The Biggest Risk in a Forward Exchange
17:00 – Why High-Level Investors Prefer Reverse Exchanges
20:00 – Buying First, Selling Later: How Reverse Exchanges Work
23:00 – Using LLCs and Qualified Intermediaries
27:30 – What Happens to the Money During an Exchange
30:00 – How to Avoid Paying Capital Gains and Depreciation Recapture
33:45 – Investment Property Rules and Common CPA Mistakes
36:00 – How Long You Must Hold a Property Before Exchanging
39:00 – Taxpayer Rules and Entity Requirements
42:30 – Using 1031 Exchanges to Scale From One Property to Many
46:00 – Why Timing and Market Cycles Matter
49:30 – Investing in Mentorship and Personal Growth
53:00 – The Role of Education in Financial Freedom
56:00 – Final Advice on Wealth, Risk, and Long-Term Strategy
🧭 RESOURCES & MENTIONS- Exchangeable – Michael Velasco’s 1031 Exchange Company
- Qualified Intermediary (QI) Best Practices
- Forward vs. Reverse 1031 Exchanges
- Passive Real Estate Investing
- Triple Net (NNN) Lease Investments
- Mentorship & Mastermind Groups
- Personal Development & Investor Education
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🧱 ABOUT THE SHOWThe Be Wealthy Podcast brings entrepreneurs the strategies to grow their business — then teaches them how to think about their money. Because wealth is far more than money — it’s freedom. Hosted by Brett Tanner & co-pilot Katelyn Mitchell.
Mission: Get Free.
📚 Free Resources: https://www.bewealthybrett.com/resources
🏦 Infinite Banking Education: SaveLikeaBank.com
⚡️ Cost Segregation Studies and 45L Tax Credit: SingleFamilyCostSeg.com
💵 Self-Directed IRA: MaxOutRetirement.com
🏢 Trust and Entity Structure: http://setupmyestate.com/
🏘️ Off-Market Deals and Cash Buyers List: TheMagicMailers.com
🛠️ Hard Money Financing: https://www.lendingcashnow.com/get-fu...
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⚠️ Disclaimer:
Be Wealthy and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational and entertainment purposes only, and should not be relied on for tax, legal, or accounting decisions. Always consult your own advisors before taking financial action.
