Molson Hart

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.

As I understand it, opportunity zones give a discount on your capital gains when you sell. If your model is to never sell why would opportunity zones work well with your model? Any suggestion of synergy seems like a stretch.

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?

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

“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.

Think about things from the perspective of a founder or investor in a start-up that exits. If you do nothing, you will pay a huge chunk of your cap gain to the IRS. Pretty much only alternative is op zone investment.