Opportunity Zones Office Hours – December 2024

Join Jimmy Atkinson at OpportunityZones.com the first Monday of every month at 3:00 PM Eastern Time, to get your Opportunity Zones questions answered live.

On this month’s episode, Jimmy answered questions about how to get started with an OZ equity raise, substantial improvement, and an OZ extension.

Featured OZ Questions On This Episode

  • How would an OZ extension from 2026 to 2028 work for taxpayers?
  • Do soft expenses like permits and architect fees count toward the substantial improvement requirement?
  • Can gains from cash invested during the Working Capital Safe Harbor period be used as return of capital?
  • Does a QOZB need to be a partnership?
  • How long does a Qualified Opportunity Fund have to deploy its capital into assets?

Featured On This Episode

About The Opportunity Zones Podcast

Hosted by OpportunityDb founder Jimmy Atkinson, The Opportunity Zones Podcast features guest interviews from fund managers, advisors, policymakers, tax professionals, and other foremost experts in the Opportunity Zones industry.

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Show Transcript

I think we’re live. And yes, we are live. Welcome to the December 2024 episode of Opportunity Zones Office Hours.

I’m Jimmy Atkinson, founder of Opportunity Zones dot com. I’m going to be taking your questions live in just a moment. If you have any questions about Opportunity Zones, you can submit them by using the chat.

But before we get we begin. I would like to say a minute or two about Opportunity Zone’s mastermind group, OZ Insiders. So if you’re looking to take your OZ strategy to the next level, but you’re not quite sure where to go, I would highly recommend you check out OZ Insiders.

It’s my mastermind group and private coaching community. We offer comprehensive premium content and networking to help you get started. Our monthly masterclass meetings cover a wide range of topics from fundamentals to advanced ensuring you have what you need to thrive.

And as a member of OZ Insiders, you’ll get access to our exclusive online community, monthly group coaching, and monthly masterclasses, providing you with valuable OZ networking opportunities and guidance from the best Opportunity Zone professionals in the whole industry. Whether you’re a beginner or you’re looking to get to the next level, we have what you need. Visit ozinsiders.com to learn more.

That’s ozinsiders.com. Just earlier, I guess I was going to say this month, but it’s December. So last month, we had Emily Lavery join us for a masterclass about the 2025 Super Bowl of Tax and what might happen with Opportunity Zones in 2025 with a Republican sweep.

Are opportunities going to get extended or not? And if they do, what would it actually look like? She was able to bring Capitol Hill staffer from Senator Tim Scott’s office along with her.

And Shea Hawkins from the Opportunity Funds Association joined us on that call as well. And it was a really great hour-long discussion all about what might happen with OZs in 2025. And that was available only for my OZ Insiders group members.

Prior to that call, we did a thirty minute group coaching call where I answered several questions and there were some networking opportunities for my members as well. So I do hope you check out ozinsiders.com if you want to learn more about that group and how to get started there. Welcome again to the December 2024 edition of Opportunity Zone Office Hours.

It is Monday, December 2nd, 2024. You can join me the first Monday of every month at three p.m. Eastern Time to get your Opportunity Zone questions answered live.

So whatever questions you have about OZs, I’m here to answer them for the next thirty minutes or so. Or if you want to talk college football or anything else, it doesn’t have to be OZ related, but let’s try to stay on topic as much as we can. Just type your questions into the chat and I’ll get to as many of those as I can.

I mentioned Emily Lavery joined us at our OZ Insiders Masterclass last month. just a few weeks back, the week after the election. And, you know, a lot of us had just been in Washington, D.C.

for the Novogratic OZ Summit. I had been talking a lot about that Novogratic OZ Summit leading up to it. I think I touched on it during our last episode of OZ Office Hours.

But we weren’t sure which way the election was going to go. Um, now we know the results are in the Republicans have taken control of the house, the Senate and the white house, of course, with, uh, president Donald Trump about ready to begin his second term in just another, how many days out are we now? About, uh, from taking office.

And I think it’s great news for the Opportunity Zones program and for the Tax Cuts and Jobs Act as a whole, much more likely that the TCJA was set to expire beginning in 2026 at the end of 2025. OZs were only meant to go through 2026. And now it looks increasingly likely that a lot of the Tax Cuts and Jobs Act and Opportunity Zones in particular will get renewed and extended.

So with that, let’s go to the questions. We got a whole lot of comments coming in already. So Andy says, good afternoon, everyone.

Andy, thanks for being here. It’s snowing big time over here. Did anybody else watch that Buffalo Bills game last night against the San Francisco Forty-Niners?

It was a snowball there. Nandish says, thanks, Jimmy, for organizing office hours. Lovely to see you as well.

Andy. So let’s see question from Nandi. Does the reg clarify on what substantial improvement includes?

Does soft expenses like permit architect fees, et cetera, count? So do the regulations include that? That’s a great question.

So let me go to the whiteboard here and I’ll just kind of explain how substantial improvement works. Of course, in order to qualify as a qualified opportunity zone investment and be able to take full advantage of all the tax benefits that are offered to investors, You can’t simply buy and hold an already existing cash flowing asset. You can’t just buy an existing building and then lightly improve it.

This is not a core or core plus type of investment opportunity here. This is really an opportunistic or development or heavy value add. The entire intent behind the policy of Opportunity Zones is to revitalize these communities and to spur new economic activity.

So in order to qualify as an OZ investor, the OZ asset has to either be brand new construction, a new building, or it has to put a vacant building back into service, or it has to take an existing building and substantially improve it. And substantial improvement, and then Dish, this is kind of really zooming out and giving everybody a little more context on what your question is, but substantial improvement is really, you’ve got… And my marker went out, live TV folks.

Let’s try the blue one instead. You’ve got a building here, right? There we go.

Good looking building here. We’ll even put a door here up front. All right, but that building is on some land, okay?

So we got the land and we got the building. And let’s say you acquired this entire asset for one million dollars. Okay.

Now you go to get it valued and let’s say the land is valued at two hundred thousand dollars. Okay. And the building comes back valued at eight hundred thousand dollars.

A substantial improvement provision of opportunity zones requires you to double the value of the asset, but including only the building value. So you need to put in eight hundred thousand dollars worth of equity or worth of funds. Excuse me.

It doesn’t have to all be equity, but you have to put eight hundred thousand dollars of improvements into the building. in order to qualify. So Nandish, your question asks, does soft expenses like permit and architect fees, et cetera, count?

And I do not know the answer to that question. So if we have any attorneys or CPAs out there who do know the answer to that question, please do chime in over the next few minutes here. Maybe we can get an answer for Nandish.

But otherwise, Nandish, I have your contact information. I’m going to… I’m going to float that question out to some of my contacts, and I will get you an answer.

If not during this live podcast episode, I’ll get it for you hopefully later today or tomorrow. And thanks for the great question. At least we got a little explainer on how substantial improvement works.

Let’s see here. Andy asks a question. He says, Jim, any recommended resources for folks who want to get started?

raising oz equity um well first of all I think there’s several steps in the process that you need to complete before you even think about raising equity for any type of uh investment opportunity um have you ever done a deal before so actually I’m gonna go to the whiteboard and I’m just gonna kind of um make a make a checklist here of what I think you need to accomplish before you actually go to market um so the so the end goal here andy is I think you’re talking about um end goal is go to market and raise capital from other investors right um I’ll say from investors But how do you get there? And by the way, once you do get here, and your question is really about how you go about doing this. I’m going to get to that in a minute.

But I want to cover some prerequisites first. Before you ever do that, have you done your own deal? And by that, I mean, and I’m just going to use real estate as an example.

Have you ever done a real estate deal? Have you ever acquired a property? Have you ever worked with a lender?

Have you ever done your inspection? Have you ever closed on a deal? Whether it’s a hundred million dollar luxury apartment building or a one million dollar strip mall in the middle of nowhere.

Or maybe something that’s a little bit more familiar, maybe a five hundred thousand dollar duplex. I mean, have you ever done anything with your own money, first of all? Two, once you clear that hurdle, I would say, have you ever done a, I’m going to say F&F raise?

Have you ever raised from friends and family? So you’ve done your own deal. Maybe then you’ve got a little bit of a track record.

I think then, maybe not in your second deal, but maybe in your third or your fourth deal, different people follow different trajectories. But at some point, You know, you’ve done a couple of fix and flips, let’s say, and you’re ready to step up and do something a little bit bigger, but you need a little bit more capital and you need a little bit bigger down payment. So you go to your mom or dad, you go to your uncle, you go to your brother, you go to your cousins, you go to your college roommate, you go to your buddy at the country club, some friends and family, right?

You raise money from maybe one or two or a half dozen people. That’s a friends and family raise. And then I think at that point, then three, then you can start considering this end goal here.

And when you do this, by the way, you need a whole other checklist of stuff. And the whole other checklist of stuff includes, I’ll just say three A, you need a deal, right? B, you need a PPM.

C, you need a deck. D, you need financials. E, you need securities filing.

And then F through Z. There’s probably 21 more of these if you go F through Z, the checklist of things you need to do. Once you have all of that in place, you’ve got all your I’s dotted, all your T’s crossed, then you can go to market and raise capital from investors.

And your question is, are there any resources who want to get started raising those equity? Then I like to say, well, I’d be remiss if I didn’t mention OZ Pitch Day. The event that I put on three times a year is a great way to find OZ investors.

I would also say OZ Insiders is a great opportunity to network with other people who are doing this and other professionals who are advising on this. And we have some investors in the group as well. Those would be my two recommendations for learning more about that.

And you know what? Just email me or call me and I can kind of give you some more personalized advice on what you might need depending on where you are in your journey, you can always email us at info at opportunity zones.com. Uh, Coni Rathbone, um, an attorney of ours in OZ insiders.

Coni, thanks for being here today. She did just chime in that soft costs do count in calculating substantial premium. So thank, thank you for, for chiming in with that.

Coni, I did not know the answer to that question. We already got Nandish saying, thank you, Coni, for clarifying. Appreciate it.

Um, And Coni is right to point out that friends and family raises also a security and does need to comply with securities laws there as well. That is true. You start raising…

money from anybody, it rises to the level of a security. What is the name of that law or that test? It’s the test, right?

I forget the name of the test, but maybe Coni can chime in with that. Coni and I did a whole episode about that a couple of years back on the podcast. If I have time, maybe I’ll see if I can dig it up and post a link to it.

Let’s see. Coni wants to know, please tell us more about Shay’s organization. I did mention Shay Hawkins.

He’s the director of a trade group within the Opportunity Zones industry called the Opportunity Funds Association Foundation. So I think it’s the largest such trade group that supports Opportunity Zone funds and helps lobby on their behalf to Washington, D.C. I should also mention the Economic Innovation Group does a lot of similar programming as well.

But that’s Shay’s organization is the Opportunity Funds Association. I believe their website is zonefunds.org. I think I have that correct.

So they’ve got a few dozen members in their organization. And Shea himself used to be a member of Senator Tim Scott’s staff. Actually, he was Senator Tim Scott’s tax policy advisor.

when Senator Scott first endorsed and sponsored the Investing in Opportunity Act nearly a decade ago now. So Shea Hawkins was actually instrumental in drafting some of that initial Opportunity Zone legislation. So he gets I think Shay definitely should get some credit for the success of Opportunity Zones and the legislation itself.

And maybe he gets a little bit of blame for how poorly the legislation was written in some cases as well. I jest. Let’s see what else we have in the chat here.

Actually, I did have a question. I had a few questions that came in via email. I saw a couple more comments from Andy.

I’ll try to pull those up in a minute. But I did want to get… to some questions that got emailed to me a little bit earlier this morning.

This question came in from Rod, and Rod asked, regarding the possibility of the Trump administration extending the OZ program, can you be more specific as it relates to the deferred taxes payable at the end of 2028. OK, so Rod, great question. Thank you.

I’ll do my best here. So I’ll go to the I’ll go to the whiteboard again. So now I’ll just kind of diagram what happens here.

So you have a you have a capital gain. that comes in, and here’s your capital gain here, this blue dollar sign in a circle. And within a hundred and eighty days, in most cases, you invest that amount or some portion of that amount into a Qualified Opportunity Fund.

I think you understand how that works. You can invest all of it, all of the gain in here or a portion of the gain. You can invest in one qualified opportunity fund or a whole bunch of opportunity funds.

There’s no restriction on how many qualified opportunity funds you can invest in. What happens is there’s a tax liability on this dollar amount and it gets deferred until… So let’s see, I’ll say tax liability gets deferred until 2026. OK, so you don’t actually recognize this gain on your tax return until the as as something that that that that you owe a liability on until the 2026 tax year. So it’s not payable until April, approximately April. I don’t know if April 15th is a Sunday or a holiday. Sometimes it’s a holiday.

So mid-April is when this tax liability is due. The pending legislation, the Opportunity Zones Transparency Extension and Improvement Act, One of the things that it does is it changes this year, this 2026 year in the tax code to 2028. So all it does is it just rewrites that line in the tax code.

And so if it passes, then this the the liability on this gain isn’t due until 2028. So now it’s payable in April of 2029.

Now, this has not passed yet and it will not pass this year, barring a miracle. It is likely that that legislation is going to get packaged into some much larger Tax Cuts and Jobs Act two point bill that the House introduces and the Senate passes and that Trump signs into law. any luck hopefully toward the end of next year so that’s what would happen I think that’s about as specific as I can get um as to what exactly would take place there and the impact that it would have so if you’ve invested in a qualified opportunity fund to date and you’re counting on having a tax liability in April of 2027 just know that don’t don’t count on this because it does require an act of congress and anything can change and anything can happen but it is possible that with some tax legislation next year that date might that tax liability due date might get pushed out by two years but uh just stay tuned stay tuned to this channel we’ll let you know when it does come through uh let’s get back to the live chat here Coni Rathbone. Howie Test. That was it, Coni.

So going back to the comment I made about when an investment product rises to the level of security, the investment of money into a common enterprise with expectation of profits based solely or primarily on efforts of others that is the how we test and uh by by by that definition there that is basically when something rises to the level of security and then if you’re trying to raise capital raise equity from investors for an opportunity zone fund or really for any type of private placement product um that is when you would need to file some paperwork with the sec either register with the sec or file an exemption from registration with the sec um typically that’s rule done through uh regulation d um anyways I don’t want this to do you devolve into a securities law podcast for too much longer but Coni, thanks for being here and thanks for chiming in uh when I forgot a couple things there I appreciate it um another question from andy here andy asked jim beyond oz’s Are there likely to be any other real estate related tax breaks included any tax legislation next year? Any buzz about this at Novogratic? Andy, great question.

Some interesting buzz at Novogratic. Actually, if you weren’t there, by the way, the energy in the room was it was really palpable that that next morning after the election, when kind of a lot of Industry folks like myself and a lot of others, accountants, attorneys, fund managers, investors kind of realized, wow, there is all of a sudden a very real possibility that this industry that we’re here for in this room in Washington, D.C. right now for this conference is not going to go away at the end of 2026.

This might be around for another five, ten years at least. So it was it was really it’s pretty exciting to be to be there on that day. I should note, though, that interestingly, Novogratic has a big focus in a lot of different community development tax programs.

Opportunity Zones is one of their biggest priorities and focuses, but they focus on a lot of different tax credits, including historic tax credits, low-income housing tax credits, new markets tax credits, but and they throw conferences for all of these different tax credit programs well the last couple of oz conferences that they’ve done we’ve actually kind of shared a conference venue kind of like split in half you know one side is oz’s and the other side has been renewable energy tax credits And the renewable energy crowd was a little bit more downtrodden than the crowd because the renewal, the renewable energy tax credits really received a boost from President Biden’s Inflation Reduction Act that got signed into law a few years ago. And And the election for them kind of went the opposite way that they wanted to go. It looked like renewable energy tax credits were going to get a boon if the Democrats were able to sweep.

And OZs were going to really receive a lot of benefits if Republicans swept. So one side of the room was very happy. The other side of the room was a little bit downtrodden.

Other real estate-related tax breaks. So renewable energies tax… First of all, I don’t know a whole lot about other real estate tax breaks.

I do know that… that that uh bonus depreciation that an accelerated accelerated bonus depreciation which has a lot to do with cost segregation studies which is done by not just oz funds but a lot of real estate funds. I think those types of tax breaks should be included in some legislation next year.

If OZs are able to pass and some big sweeping tax bill comes through from the Republicans, you can I would think that you could count on accelerated bonus depreciation being in there as well, because I think that’s already started to sunset, and it’ll likely be renewed if there’s some action by Congress next year, along with OZs. And then any other related to, I don’t know of any others other than that though, Andy, but I’m sure there’s others in there. And if you know in the chat, feel free to chime in with some comments.

Robert Parisi, great moment for all of us. Robert watching on LinkedIn. Thanks, Robert.

Appreciate the comment there. Let me go back to our questions that I got via email. I’ve got a couple more email questions.

I’ll try to get to at least one or two of them. And if you have any other questions for me, those of you attending live, please feel free to chime in in the live chat, whether you’re watching on YouTube or LinkedIn. But this question from Jeff.

Jeff asks, are there funds you’re aware of that might be better suited with cost segregation, which I just mentioned a moment ago, refinance strategies and other returns that might help to offset the tax event. There are a number of funds, Jeff, that are able to do cost segregation studies. I think if you’re doing any type of big enough real estate project, know I don’t know if you would necessarily bother with a cost irrigation study below a certain threshold if you’re doing like a five million dollar deal um or a ten million dollar deal even it might not be worthwhile but anything I would say eight figures and up um I think I think if you’re a developer or fund manager managing that deal, you’d be remiss not to do a cost segregation study.

By the way, we did just do OZ Pitch Day a couple weeks ago. We did have a showcase of opportunities on funds and deals, and a lot of them did highlight Maybe not directly right up front, but if they were asked a follow-up question, are you going to do a cost seg? More often than not, the fund manager would chime in like, oh yeah, of course, we’re going to do a cost seg.

Talk to my team about that. We can get you more details. It’s usually not anything that’s really very strongly promoted, I would say, the cost segregation.

It’s a little bit nuanced and it also doesn’t apply. to all investors um but uh but I I think I I would suspect that the the vast majority of larger more institutional level oz funds are doing cost segs and taking advantage of bonus depreciation accelerated depreciation refinance strategies I know a lot of um oz funds early on at least um were hoping to do a cash out refi for their early investors in ’18, ’19, ’20, by the time that ’26 rolled around and they had a they were going to have a tax liability due in April of 2027, that that would be something that you would really need to I don’t have any real insight into at this moment in time, that’s still like a year or two away when those refinance strategies I think would really come into play. You would need to get in touch with the fund manager of those individual funds that you’re considering to ask them about that.

Any other returns that might help to offset the tax event? You know, one thing I guess that could help offset the tax event is, and this is just kind of a unique type of fund. I don’t mean to tout this one particular fund too much, and this is not investment advice or tax advice, and I’m not promoting this product, but just simply for general information purposes.

There is a an oil and gas fund from U.S. Energy Development Corporation that is structured in the fund, and they’re able to take advantage of intangible drilling costs to offset income to their fund and income on their investors tax returns as well. So that’s I think that’s like another non that’s a good example of a non real estate kind of interesting incentive that can help offset some tax events there.

Let’s see, a question here, a live question here from the Boomcacia Chronicles. Thanks for chiming in. Are foreign nationals allowed to invest in QOZ funds?

Yes. If you are a US taxpayer and you have, even if you’re a foreign national, but if you have capital gains tax liability to the US government, then yes, you can invest in Qualified Opportunity Zone funds and receive the tax advantages associated with investing in QOZ funds. Absolutely.

No problem there. Let’s see. Oh, we just got another one in here from, I was about to go back to my email bag.

I’m gonna try to wrap up this episode in just a couple more minutes, but I did just get this question in from Alex. I didn’t screen it yet. We’ll see what it says live on air here.

And I still also need to get everybody the link to that podcast episode that I did with Coni Rathbone. on the opportunity zones podcast as well so I’m I’m actually searching for that right now uh because we we did cover the howie test and it was a it was a pretty good episode so let’s see if I can I can find that one I just found it okay so I’m gonna post that in the chat this is a uh episode with Coni Rathbone, uh where we discussed the Howie test I just posted a link to that in the chat and a link to that YouTube video you can watch at a later time. Let’s get to Alex’s question now.

So Alex asks, I am in my working capital safe harbor. And while I’m in that period, I did some cash management investment that is appreciated quite a bit. Can I use those gains as return of capital?

I’m going to throw this one to Coni. Coni, if you’re still here, I would love it if you can chime in on Alex’s question here. And then he also submits a follow up that says, I haven’t done that.

Any special considerations? Um, and then boom, Keisha chronicles just mentions that it’s Heather. So, Hey, Heather, good to see you there.

I didn’t, I didn’t recognize the name of your, I think it did. I think it automatically just grabs your YouTube channel name. So, um, no worries there.

Thanks for being here, being here, Heather. Um, Alex, if, if, if Coni doesn’t chime in right away, I’m going to forward your question onto her and, uh, hopefully she can get you an answer. Cause I know she’ll know the answer to that question.

Um, Nandish asks, why does a QOZB need to be a partnership? I understand that you need it for QOF. Also, if you just forced QOZB as a partnership for tax savings, can the IRS collapse that during an audit?

So I don’t know the answer to your second question. I think in general, the IRS can do whatever it wants during an audit. But I don’t know the answer to that question.

The first part of your question, why a QOZB needs to be a partnership, just every entity in the chain that the QOF and the QOZD both just cannot be disregarded entities. So I know a lot of people ask, can I just make it a single member LLC? No, you can’t because it needs to get its own tax ID number and it needs to…

be and I think I guess you can get your own tax ID number for a single member LLC, too, but it cannot be a disregarded entity. I don’t understand the mechanical reason why, but that is just the way that it needs to be. And you are right to point out that.

Yes. And we got this question, I think, at the last one or at some other webinar I did recently. Hey, I know a QF needs to be a partnership.

Does a QOZB need to be a partnership too? And yes, yes, it does. Or it could also be a corporation.

It doesn’t have to be a partnership. It could be a corporation. But yeah, the bottom line is it cannot be a disregarded entity.

Thank you for the question there, Nandish. Let’s see. Tim Shields asks, how long before you have to invest the gains after funding the QOF?

That is a good question, Tim. Typically, you’re granted a thirty month working capital safe harbor period and then During that time, you need to show that you are adhering to your working capital safe harbor plan and that before too long, you need to make sure that on form eight nine ninety six as the fund that you’re able to pass that asset test. And at a certain point in time, you do need to adhere to that ninety percent good asset test.

Typically, the way it works, by the way, just without a working capital safe harbor plan, I’ll kind of. map out how it looks on the whiteboard here. And it kind of depends when the money comes in also, because for a fund that adheres to a calendar year tax year, you have tests twice a year.

You have tests on June thirtieth and again on December thirty one of every year. And the first period, by the way, is a cure period where you don’t have to pass the test. So if you get money into your fund or if you fund your own fund on, let’s say, January one, you’ve got dollars coming into the QOF, right?

On June thirtieth, you get like a free pass, because this is considered a cure period. Okay? December thirty-first would be the first date in which you would need to pass a ninety percent test, where at least ninety percent of the dollars in the QOF need to be invested in good assets.

Qualifying opportunity zone assets. So this is the schedule without consideration of a working capital safe harbor plan. With a working capital safe harbor plan, it buys you an additional thirty months of flexibility.

How that all works and when it kicks in needs to be evaluated on a case-by-case basis. If you have specific questions regarding your own personal situation, Tim, email me info at opportunityzones.com. And I’ll make sure you get to the right spot.

And I’ll probably refer you out to an attorney to help you out with that. Let’s see. Let’s see.

We’ve got a couple of questions about a foreign national here. What if the foreign national wants to join a Q O Z as an EB five? I think that means they’re an EB two.

I’m not familiar with EB two EB five. I think EB five dollars and QOZ dollars can be, can both go into the same project. In fact, I know of some projects, some development deals, um, Again, I don’t mean to tout this particular one, but this is just another example that comes to mind.

They were a presenter at OZ Pitch Day, I think, earlier this year toward the beginning of this year. They weren’t on our last one. But Driftwood Capital has this large hotel and convention center and entertainment center.

uh complex in miami in an opportunity zone and they’re taking in it because in opportunities they’re taking in uh oz equity through their qof and they’re also taking in eb-five money um through their eb-five platform and it’s all going to fund the same project but they’re two different buckets of money they’re two different funds so you they’re two different parts of the capital stack so you can layer different types of equity into the capital stack different types of capital in the capital stack um debt financing non-oz oz eb-five uh tax credits you name it but um yeah I don’t know yeah so I guess a foreign national could could help fund a qoz project through an eb-five but um you would need to you need to have that set up through the project sponsor there’s a good good question and yes you did clarify eb-fives thank you um Nandish, I like your comment. The IRS can do whatever they like. Yeah, that’s kind of what I like to say.

I’ll take a couple more questions here, and then I’m going to wrap it up for the day. We do this every first Monday of the month at three p.m. Eastern.

This is our last episode for 2024. I think we will have some changes in store for our next episode in 2025. which will be taking place on, let’s see, three, four, five, six.

What is that? January sixth, I believe. I’m like manually counting on my calendar over there.

I think January sixth is the first Monday of January and we’ll be back with another episode then. But let me get to one more question here from First Oregon LLC. Do sponsors allow small investment amounts like twenty five thousand dollars?

Some do. Yes. I would say that twenty five thousand dollars is probably the lowest amount minimum that I’ve seen.

There are a handful of qualified opportunity funds that do accept as little as twenty five thousand. I haven’t seen I don’t think I’ve seen any or very many at least that would allow investments smaller than that, which with each investor that that invests into a qualified opportunity fund or really just any type of private placement investment product, there is a cost. for the sponsor or fund manager for every investor that comes in.

It’s just more paperwork, more investor relations. So they don’t, it doesn’t make sense financially for a lot of these fund managers to bring on investors if they don’t have at least that amount of twenty five thousand dollars. Now, by the way, I should say that the amount of qualified opportunity funds that accept an investment amount of that little is pretty low.

Most of them, I would say, are fifty thousand and higher. Actually, I might even say the majority of them are one hundred thousand dollar minimum and higher. But yeah, there’s a few that offer smaller investment, almost twenty five thousand dollars or so.

Um, let’s see. And Coni did just chime in with one more comment here. Uh, and then I think we’ll wrap up the episode for today.

She says using the appreciation made. So I think this is in response to the question that we got from, uh, and I forget who it was. It was from Alex Soto.

Alex says, um, he’s working with his working capital safe Harbor while I’m in that period, I did some cash management investment that is appreciated quite a bit. Can I use those gains as return of capital? And I think Coni has answered this question here.

She responds, using the appreciation may be usable as a return of capital. However, there are restrictions on how much capital can be returned. Speak with your CPA about the exact investment and dollars.

So thanks, Coni, for chiming in there. I appreciate that. Um, that’s all for today.

I’m sorry. I didn’t get to all the questions there, but, uh, uh, I’ll save them for next month or if there are any other questions that I didn’t get to, you can always email me info at opportunity zones.com. Um, in the meantime, If you’re looking to take your Opportunity Zone strategy to the next level, but you’re not sure where to go, I would encourage you to check out OZ Insiders.

Once again, OZ Insiders offers comprehensive premium content and networking to help you get started. If you liked This session today, first of all, if you’re on YouTube, give us a thumbs up. But then also, I would encourage you to check out OZ Insiders because a lot of what I did here is what we do as a big group inside of OZ Insiders.

And our monthly group coaching calls and masterclass meetings really do cover a wide range of topics from fundamentals to advanced. We try to help you get exactly what you need to thrive within the Opportunity Zone ecosystem. And as a member of OZ Insiders, you’ll also get access to our exclusive online community.

our monthly group coaching, our monthly masterclasses, providing you with valuable OZ networking opportunities and guidance from the best OZ professionals in the industry. So whether you’re a beginner, or maybe you’ve already done a little bit of OZ work, but you want to get to the next level, we have what you need at OZ Insiders. Visit ozinsiders.com to learn more.

That’s ozinsiders.com. Let’s see. I think that’s it.

That’s all the time we have for today. Thank you for watching. Again, if you enjoyed this episode, please give me a thumbs up and make sure you subscribe to our YouTube channel.

I’ll be back with another episode soon. Join us Mondays at three p.m. Eastern time on the opportunityzones.com YouTube channel.

Thanks everybody.