All Forum Posts by: Norberto Villanueva

Thanks, everyone.

Establishing the trust and confidence necessary to complete multiple deals together, another key takeaway is the importance of taking care of your business partners (contractors, lenders, etc.) first. 

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $220,000
Cash invested: $10,000
Sale price: $240,000

Just a light cosmetic flip

What made you interested in investing in this type of deal?

Jump in the water

How did you find this deal and how did you negotiate it?

Off-market. Not very well. Paid too much!!

How did you finance this deal?

Private money

How did you add value to the deal?

Replaced some carpet, refinished wood flooring, interior paint, light kitchen remodel

What was the outcome?

The private lender offered to split what little profit there was, which meant not keeping to the terms of our agreement so I declined and made no money!!

Lessons learned? Challenges?

You make your money when you buy

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I was the investor and selling agent.

Quote from @Canesha Edwards:

@Raza Rizvi

The short answer is Yes a SFR, duplex, etc still qualifies under the regulation. The main requirement is that any property purchased in an opportunity zone must be purchased through an Opportunity zone fund.

Now, this can be a single entity fund or a fund can be set up for the sole purpose of investing in these type of properties. The type of fund you will need is going to depend on your investing strategy.

A couple of things to keep in mind. A fund has to have at minimum 90% of its assets located within a qualified opportunity zone. Also, remember the longer you hold the property, the larger the tax break.

Qualified opportunity zones hold their designation for a maximum of 10 years. Now, I believe if you sell a QOZ property and invest the capital gains from that sale into another QOZ, taxes can be deferred as long as deferment doesn’t exceed 10 years.

From my understanding, taxes can only be deferred for a max of 10 years. The program will be in place until 2047. Therefore, don’t feel rushed to find properties. Take you time to understand the program. Talk to a good lawyer and CPA who work with real estate investors and understand the regulation.

The final publication of the regulation should be posted in the Federal Registry soon. Which will clear up a lot of pending questions.

My development firm is doing a lot of work in this area. We develop our own deals as well as provide consulting services to our clients and partners. But we’re more into the Commercial/ Apartment sector. I hope this helps. Feel free to reach out to me with any questions.

Bumping the post to share learning that, by purchasing property in a corporate entity (QOZB), it can come before the QOZF.

Quote from @Robert Ellis:

Quote from @Stuart Udis:

@Robert Ellis In order for the QOZ investor to reap the tax benefits the hold period has to be longer. I don't believe raising QOZ money for entitlements that would be resold 6 months later would pick up traction. More realistic to raise the QOZ money to participate in the post entitlement construction and stabilization hold period or alternatively entitlement through stabilization/hold period.

 This is the structure we were looking at which is more of a subsidiary structure and this applies to raw land development: 

📌 Structuring Plan

1️⃣ Set up a QOF to raise capital from investors.
2️⃣ Create a QOZB to handle hotel & parking development (each separate land parcels).
3️⃣ QOF owns the land & funds QOZB for development.
4️⃣ Raise capital through QOF equity, bank loans, or JV partners.
5️⃣ Develop the projects & operate for 10+ years for tax-free gains.

Yesterday, I learned that the QOZB can come before the QOF. Today I learned about the Substantial Improvement Requirement, which means that, to qualify as a QOZ business, the property must be "substantially improved", which is defined as the QOF investing an amount that is equal to or greater than the acquisition's adjusted tax basis within 30 months.

Currently in analysis, not quite paralysis mode (yet), I haven't gone through the process but here's what I think I know.

1. The QOZ business and fund can and likely should be separate entities. One operates the business, and/or holds the property within a QOZ, the other pools investments.

2. The QOZB's only geographic boundary is that it must fully operate in QOZs.

Hope this helps.

Hi Dwaine. Are you the contract holder?

House hacking with 20k is a great start. Ranging anywhere from zero to 5% down, did you know it's possible to buy a 1 - 4-unit property using FHA, VA, or FNMA/FHLMC (Conventional) financing programs? "Just" make sure it cash flows before you buy, rinse, and repeat and you'll be on your way to an early retirement in no time. All the best!

Hi Tanita. Welcome to BiggerPockets. Whatever you do, beware the guru. 

Working with a licensed broker in Phoenix to source properties for a long-term, institutional SFR buyer, I welcome the opportunity to mentor and build with a like-minded professional. Feel free to connect.

I am not an attorney. 

Per 

Title 40 - Professions and Occupations
CHAPTER 57
Real Estate Brokers, Brokers-in-Charge, Associates, and Property Managers

SECTION (D) 
(E)(1) "The advertising and marketing of real property is to be distinguished from the advertising and marketing of a contractual position in a sales agreement to purchase real estate. An advertisement that markets a contractual position to acquire real property from a person with either equitable or legal title and does not imply, suggest, or purport to sell, advertise, or market the underlying real property is permissible under this section."

In other words, my understanding is that wholesaling is NOT illegal in South Carolina, so long as any advertisement offers to sell the contract (equitable interest) only. 

Nonetheless, the best practice appears to be compiling and only marketing to a bona fide buyer's list, rather than the general public.

You've come to the right place, Roman. Here's to all the best in your journey. Happy to help where I can.