All Forum Posts by: Justin Leffew
Justin Leffew has started 2 posts and replied 5 times.
Post: Partnering with Operators
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I am in the process of putting together a $100 million real estate fund focusing on multifamily and NNN medical buildings. As I've been doing research, it seems like the best strategic move for an inexperienced fund manager is to partner with Operators who are looking for capital for expansion and/or liquidity. Whether that be a real estate syndicator experienced in managing large apartment communities or a healthcare company looking to open a new location, by utilizing experienced operators, we can shorten the learning curve and leverage already successful businesses.
I'd love to hear some thoughts on this idea of actively searching for businesses in need of capital for real estate instead of only searching for real estate for sale.
Post: Opportunity Zone Real Estate Fund
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Originally posted by @Tanner Crawley:
@Justin Leffew
It cannot be a financial services company. Owning and operating real estate will not qualify.
I appreciate the response, just trying to get more clarification on it. To my knowledge, a real estate company wouldn't be classified as a financial services company. Pretty much all OZ funds do is own and operate real estate and businesses in OZ's right?
Post: Opportunity Zone Real Estate Fund
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This is from Housing Wire
"Now, the Treasury has clarified that a business qualifies if 50% of its employee’s hours or wages are from inside the zone, or if the property and managers needed to produce 50% of the revenue are from inside the zone."
Post: Opportunity Zone Real Estate Fund
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The clarifications say 50% of employees must work in a zone. The big question was investing in start ups and businesses that do business elsewhere (mainly tech companies but also home repair companies).
Originally posted by @Mark Creason:
In the guidelines for an Opportunity Zone Fund, I believe it states that you need to invest 90%+ of the proceeds into an opportunity zone census tract properties. You also will need to use capital to significantly improve the properties. Let me know what the attorney comes up with.
Post: Opportunity Zone Real Estate Fund
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After reading the clarifying language for opportunity zones, it seems as though a newly formed real estate fund could buy an office building in an opportunity zone and hire employees to help run the fund (they work in the OZ). Even if the fund bought assets in non opportunity zones, the tax benefits would apply to said company and it's long-term holdings. I could be wrong - I have an appointment with my attorney next week to discuss more. This could potentially save investors millions upon the fund closing without needing to invest a bunch in actual OZ's.
Link to article: https://bit.ly/2ZEAVPd
Link to rule updates: https://www.irs.gov/pub/irs-drop/reg-120186-18-nprm.pdf