If I have zero dollars invested in an asset and I receive $1, a return on zero is infinite. How is this possible?
In real estate they way it works is you buy something and force appreciation through improvements to the dwelling, at which point you would then refinance the property and since it is refinanced it is tax free the amount you get out of the refinance. Once that is done you can then roll the proceeds into another property via a 1031 exchange, but you still get to keep the first asset, which means you have an infinite return on the first property since you technically have no money invested in the property.
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