Indianapolis Opportunity Zone Investment

[Aaron Laster]

Good evening BP Community,

My partner & I recently signed a purchase agreement and made our first payment towards a portfolio of 3 properties, all at the same corner in one of the top designated Opportunity Zones in Indianapolis (46218). The package consists of a 3,000+ sq ft church, a 912 sq. ft. 2 bed 1 bath home, and an 8,000+ sq. ft. vacant lot.

We have discussed and written down the best exit strategies for us, that makes a lot of sense financially, but we'd like to maximize the benefits of the tax code added on December 22, 2017, and would like the help of the BiggerPockets Community to do so. Our top exit strategy is to sell the commercial property (church) to a small business owner to come in and receive the benefits of an Opportunity Zone, use the capital gains from that property to make minor improvements to the small house to sell as a turnkey rental property, and lastly use the capital gains from that property to enter a partnership with a developer to develop affordable apartments on the vacant lot.

Please feel free to leave any comments or feedback and don't hesitate to reach out to me in regards to real estate in Indianapolis.

[Aaron Laster]

@Chase McArthur

Quite a bit. An incentive that a developer would have outside of having a project to develop and getting their development fee, is having equity in the multifamily property. 

We're aware of the tax deferral mechanisms in place we just see opportunity in new construction deals in multiple neighborhoods throughout Indianapolis. I disagree with your sentiment that OZs are bait for a developer to attract capital for its projects. We see this as an even better opportunity to develop nice affordable housing in underserved neighborhoods around downtown Indianapolis, which has already been our primary strategy in real estate investing.

We're willing to have our capital locked up in this project for the next 10 years, especially with the property cash flowing.

I'll be sure to post more about this deal.