As an early adopter and thought leader of the Opportunity Zone program, Caliber CEO & Co-Founder, Chris Loeffler, answers some questions regarding why it is one of the most discussed topics in both finance and real estate today.
Q: What is all the hype about Opportunity Zone Funds? Is the tax savings really that compelling?
A: Many have stated this program represents the greatest tax reduction opportunity of our generation. When modeled against a standard investment using the same underlying rate of return and time assumption, an opportunity zone investment produces more than 2x the net return on investment.
Q: Where did this tax reduction program come from?
A: Opportunity Zones were enacted as part of the Tax Cuts and Jobs Act passed on December 22, 2017. The driving force behind the tax code changes was to incentivize economic growth in designated communities where new real estate and businesses can thrive.
Q: Is any taxable capital gain eligible for the program?
A: Short and long-term capital gains derived from any source – sale of a business, a real estate asset, stocks you own, etc. – are eligible for the program benefits. Investors who “wait and see” on this program will miss out, as the gains must be invested within 180 days of being realized to qualify.
Q: Who can I work with and how is my money invested?
A: While the recent buzz surrounding Opportunity Zones have spurred plans for many new Funds, there are few qualified funds open, available for investment and ready for you to take advantage of.
One option is the Caliber Tax Advantaged Opportunity Zone Fund, LP which opened in 2018 and has begun investing directly into a diversified portfolio of real estate assets in qualified zones throughout the Southwest growth markets. You can learn more about the fund at caliberco.com/opportunity.
Keep in mind real estate investment requires the right team, an operating history, and a track record of success.
Q: Are there options for my other forms of capital?
A: Yes! Caliber has become a leader in real estate private equity investment in Arizona and can help you find the right options to grow your wealth or generate stable income from your capital. Give us a call at 480-295-7600 or connect with us on our website to setup a conversation with the Caliber team.