There are many tax benefits. Accelerated depreciation can result in a paper loss on an LPs K-1 statement, which can also be used to offset other gains in your investment portfolio. Possible 1031 exchange into new deals can help you grow your earnings tax deferred. A supplemental loan or a refinance can return a significant amount of initial invested equity, which the IRS considers a non-taxable event. You may also invest using a Self Directed IRA (SD IRA), which would allow you to return your profits to your IRA account.