For example on a 100K investment in the first year you get about 40-50K of depreciation on your K-1. This is possible because the investment deal managers bring in a firm to account for all the "stuff" in the units like appliances and things and these things depreciate quickly as is coded into laws.
These deprecations offset any taxes that would normally be incurred.
Also when the property is sold, if the money from the sale is invested into a new property within 90 says there is also no tax incurred on that large transaction.
The single deal roughly doubles the return, plus the passive income each year. You are taking that doubled profit and putting that money into a completely new deal and different property and they are doing the same ~5 year complete revamp and sale.
Here are one of the managers of one of the deals I am invested in. I am only 100K out of several million invested, and the mangers have a much larger stake, so they have way more on the line to do well in turning the property around and did their due diligence to find a place to buy that was undervalued.
I hope that helps you understand what I am talking about a bit better.