I'm looking at starting an Opportunity Zone Fund & LLC. My question is if I sell a current investment say for $200k that I purchased for $100k and made $50k in improvements (so $50k gain). Can I then mortgage the house and transfer the money the bank will finance back into the fund? And then once I purchase another house and improve it, rent it and mortgage again, can I keep going? Basically, keep using the original fund money, add houses, put mortgages on them, and keep rolling forward. And then 20 years later, when I go to sell them, will all the gains be tax free? And can I pull out the original $150k investment (before the 50k in gains) at some point without any issues? Ideally once I had rent money coming in and also other sweat equity gains from improving the properties, I'd like to get the original cash back out.
Had the same question. Presumably at some point, once you've built up enough equity through BRRR and made enough money through monthly cash flow, you would be able to get your initial capital out and yet keep "substantially all" of your assets in "qualified opportunity zone property" (90% for QOF and 70% for QOZB).
Can anyone with more practical experience provide an opinion?