All Forum Posts by: Tony Kim

Yeah, I was scratching my head at Wise's response... it almost seemed like he was responding to a completely different thread as he didn't properly represent your points at all! Also, why even bring this up after everything appeared to have been settled....other than to try and stir the pot a bit more, under the pretense of coming to the aid of his Turnkey brethren? But yeah, he's entitled to his opinions...it's a free country. 

Adding 300-400K with zero rehabbing?

Just one block away from our house, we have flippers adding 7 figures to the price. Of course, there was a good amount of rehabbing done, but $1.1M to $2.1M??  OK... it'll be interesting to see what happens. We've been monitoring its progress as we walk by with our dogs on a daily basis.

https://www.redfin.com/CA/Los-Angeles/890-S-Bronson-Ave-90005/home/6917421

 Are you sure about that?  For an 18 year period, a 1,300% increase is equal to an annual return of 16.29%. I agree that you might be hard pressed to find a mutual fund that performed this well for 18 years, but it certainly isn't out of the realm of possibility. If you include employee matching as part of the calculation, then I can easily see how this is possible.

The Dow down another 2.13% today...but my cannabis stocks netted a gain today.  Hehe, don't ask me how they did yesterday though!

I decided a long time ago that relying on stocks for early financial independence will not work for me. Unless you spend a life-time of making virtually max contributions to the various tax deferred vehicles, you're not going to end up with much by the time you reach retirement age....let alone early retirement.  

Also, my goal is not to be financially free when I'm 59 1/2 years old.  My goal is to be financially free ASAP.  The best way to go about this FOR ME is to make RE the foundation of my financial portfolio and live off the passive income it provides. I'm at a point where I could probably consider myself financially free now, but it would probably take me at least a year or two to properly convert everything to core cash-flowing assets. 

This does not mean stocks are not a great tool for wealth building. I invest in stocks because they serve a good purpose for me. If not for stocks, I would not have had the money to buy my first property. I also invest in stocks when I see a middle to long-term opportunity (5-10 years), kind of like what I see right now in cannabis. I'm sure that some of my positions will go bust, but I'm also sure that some of them will grow a lot and provide quadruple digit total returns in the long term as the Cannabis industry moves more into the mainstream.

@Frank Wolter I wish I had read your story earlier in my life. Thanks for sharing and being such an inspiration!!

I love your point about marrying well...because that truly is important. If not for my wife, I probably would never have gotten into real estate.

Oh and regarding vacations, my wife and I love to travel and so we do spend a considerable amount of money visiting other countries. But when we feel like saving, we go on camping trips. Very relaxing at a fraction of the cost. 

I disagree also. It will take time and patience, but you need to find a property with a value-add opportunity. Also, it takes time to build up a team that can rehab properties quickly and at significantly lower than retail....which is what you need in order to make this strategy work. My contractor does this for me because me and a group of my friends consist of 90% of his business and have been working with him for over a decade.

Whoa, take it easy...speak for yourself.... I thought I was just helping. 

And for the record, my link takes you directly to the text of the bill that directly answers your question. I guess you didn't see it for some reason....I'm glad you are finally able to see it now.

Did you not see the Bold Faced text in the link I sent?

Also, what kind of text are you looking for? "Hey, you can only defer money from capital gains, and not the original return of principal???  You've read government statutes before...they're never written in plain language.  However, I just don't see the confusion with:

“SEC. 1400Z–2. DEFERRAL FOR CAPITAL GAINS INVESTED IN OPPORTUNITY ZONES.

“(a) Special Rules When Gain From Sale Of Property Invested In Opportunity Zone Property.—

The text above specifically states Capital Gains. Not sure how much more clarity you are looking for.

If you want the opinion of a prestigious law firm, then you can follow the link below.

https://www.skadden.com/insights/publications/2018/08/opportunity-zone-funds-offer-new-tax-incentive

 https://www.congress.gov/bill/115th-congress/house-bill/828/text#toc-H2CE36B67ACCC4F89BD0B2571450C0176

The portion of an OZ fund interest attributable to any capital invested in excess of the qualified gain amount is not eligible for the OZ tax exemption. 

Also, just stop and think about what it would mean if your understanding is correct. This would pretty much mean the extinction of the standard value-added syndicated deal.  Why would anyone invest in any non-OZ value-added syndicated deal if all they had to do to avoid capital gains taxes was to maintain a ten year holding period? Each OZ fund would be set up for zero distributions till year ten when the property is sold and RG proceeds and ROC distributions are made.

The resulting gains are tax free if held in the OZ fund for 10 years, but that original investment must consist of capital gains from the sale of an investment such as real estate or stocks.  The basis of that money goes up 10% then an additional 5%, thereby lowering your tax liability, but as far as gains made in the OZ fund, that has to come from money subject to capital gains taxes.