An Opportunity Zone is an IRS sponsored area, set by the Tax Cuts and Jobs Act of 2017, (for investing in funds that are going to help gentrify developing, or low-income areas)
The first set of Opportunity Zones were “ assigned” on April 9, 2018 spreading from brickell all the way to North miami beach, the opportunity zones haven’t been as big as they are today.
Disparity pricing is a huge upside to investing in real estate. This is also known as making money on the buy. Disparity pricing is also missed out on when investing one’s capital with a fund. They might be able to find a deal and take advantage of a great price reduction but, the individual with capital in the fund will not see as great of a return from the price reduction on the buy.
Opportunity Zones are based on the premise of construction. The Funds that go into the project are essentially being trusted to find the right developers, contractors, property managers, and to correctly gentrify a neighborhood (that people might not particularly want to invest in at the time because of the crowd surrounding or living in that area). This is a big ask, especially when facing the reality that construction projects frequently take longer than expected, and come in over budget. Fees are the lifeblood of a fund and can catch non-informed investors in less than optimal situations. One must be wary of the rules of the fund, not only to buy in but when you are allowed to sell. When capital is taken off the table in 5-10 years time, it is imperative to be aware of the fees taken after the dust settles and here at kravits and Guerra law we can take care of that for you.