Our model (buy, rehab, refinance to return capital, hold w investors forever) turns out to work well with the Opportunity Zone rules. Bizarrely, a few LA 'hoods, in which we've done ~20 deals, are OZs (bizarre bc they didn't need the help). Starting to look closely at this now.
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You're missing several key advantages. Worth googling, but: can defer cap gain tax on sale of asset today for up to 10 yrs and gain is reduced by 10% or so. We can refi out the cash after like 24 months... So have your cash mostly back, don't pay tax for 10yrs *Not tax advice
Your mode is to never sell. Capital gains is not triggered by a refinance. So if I’m missing several key advantages, which are the ones I’m missing that benefit your model?
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Benefit isn't to my deal... It's to the capital. Can sell an appreciated asset, like your share in a start up that exits, move that money to real estate in LA w/o paying cap gains for 10 years
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“Our model (buy, rehab, refinance to return capital, hold w investors forever) turns out to work well with the Opportunity Zone rules.” So this is wrong. And opportunity zones don’t work with startups (as they’re usually defined) AFAIK.
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