Opportunity Zone investors in Philadelphia

Opportunity Zone investors in Philadelphia

Rental Property Investor · New York, NY · Member since 2017 · 25 posts · 15 votes

Hey BP. Does anyone know of any Opportunity Zone Funds that purchase and develop SFRs/duplexes/Triplexes/Quads in Philadelphia? I heard through the grapevine one fund purchased up a bunch of properties in Strawberry Mansion earlier this year, but not sure if there are individual investors out there looking for properties to utilize the benefits of investing in an Opportunity Zone Fund. For those investors who do not know, essentially Opportunity Zone Funds purchase and develop properties in designated Opportunity Zones. The proceeds of the investment can come from the gains of another investment that is not real estate related; for example, you sell x number of shares of Microsoft and you have a 100K gain. You can defer a large portion of that gain if you invest in an opportunity fund that purchases and develops properties in an opportunity zone. There are tons of legal requirements and criteria that must be met and I am not an accountant or legal expert so I do not want to get into the details. There are tons of podcasts out there about Opportunity Zones that you can review on your own. Maybe Brandon and David should have an expert on Opportunity Zone Funds on their show?? Anyhow, I am just looking to start a conversation with anyone actively doing this kind of investing in Philadelphia. Thanks.

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  • Real Estate Investor · Philadelphia, PA · Member since 2015 · 13 posts · 1 vote
    7y

    @Bradford Behrins

    I am definitely interested in this.. Good Question!

  • Member since 2019 · 30 posts · 9 votes
    6y

    @Bradford Behrins @Ted S. did anything ever come of this? I'm in pgh

  • Rental Property Investor · New York, NY · Member since 2017 · 25 posts · 15 votes
    6y

    @Nashid Ali crickets... 

  • Member since 2019 · 30 posts · 9 votes
    6y

    @Bradford Behrins ok I get a lot of inbound in the OZ space. I've been pretty busy in Pittsburgh so I haven't had a chance to follow up on Philly leads.

    you just want to connect with an OZ investor in Philly to learn more about the practical landscape? this could help us both. it's a shame I know more about Cleveland OZs than Philly.

    I'll follow up with contacts and see what I can gather. lmk if you have any OZ questions, I am a lawyer. I would caution anyone saying they are a legal expert in OZs bc the law is still so new. we haven't even gone through a full regulatory cycle

  • Rental Property Investor · New York, NY · Member since 2017 · 25 posts · 15 votes
    6y

    @Nashid Ali Yes there are a lot of properties in OZ zones in Philly neighborhoods that would be great for OZ investors, but I do not hear of anyone taking advantage. I am renovating a property now that would have qualified. When I networked, I was told the property was too small. The OZ investors I have encountered are looking for larger multifamily. Just trying to gauge if there is a market out there...

  • Member since 2019 · 30 posts · 9 votes
    6y

    @Bradford Behrins yea you're getting the right feedback. I'm seeing midmarket developers raise 6 figure funds. We did one in Baton Rouge. Bc it's Philly, so close to NYC, the appetite for OZ investors is likely closer to the institutional level, $3-5M+.

    Have you considered reaching out to other developers or property owners and combining your portfolios to raise a larger fund? I've seen banks happy with 6% annual returns. Their main issue is deal size. So if you can provide the groundwork to create a large offering, you'll have something these larger funds and investors can sink their teeth into.

  • Rental Property Investor · New York, NY · Member since 2017 · 25 posts · 15 votes
    6y

    @Nashid Ali Thanks for the feedback. Yes I am contemplating doing something just like that with some local partners who would be able to provide a portfolio of OZ properties ripe for renovation. I understand the regulation is still being interpreted, but is there a specific deadline when the OZ funds need to begin to execute their plan? For example, how long do I have to form a OZ fund, raise the money and deploy the capital to purchase 20 SFRs/duplexes and/or triplexes ? Either way, the OZ fund would need an experienced attorney to guide the general partners/managing members. Is that something you would be able to do? Thanks for your feedback.

  • Member since 2019 · 30 posts · 9 votes
    6y

    @Bradford Behrins. with the right formation structure (OZ Fund LLC to OZ Project LLC), you have 24 additional months to deploy capital. This is in addition to the 6 months investors have from incurring the capital gain. So 31 months total.

    Yes, we have a great beta called Gainvest to streamline the OZ investment process. gainvest.co

    Quick. Easy. No minimums. No fees.

    Bc of the timing deadlines, we wanted to make a product that could facilitate these investments quickly and easily. Feel free to check it out, browse through some of the projects we have now. I'm working on the coding right now to add features some investors have been asking about.

    Here to help.

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