Off Market deal in Oceano, Ca.

[Jen Narragon]

I have a message out to the seller confirming his asking price and I'll confirm once I do.  

This is a summary from the seller:

The property features an existing residence situated at the front of the lot, with a large backyard. Alley access currently used for RV parking could be used for Condo addition ground floor parking. An underground basement could also be engineered to maximize square footage.

The addition conceptual drawings feature panoramic views from 2nd, and 3rd floors with a small ocean view from a large roof deck. These conceptual drawings illustrate the highest and best use of this property. Randy Russum of RRM Design SLO, walked this property and created the basic footprint of these conceptual drawings that fit within SLO County Zoning, Oceano Beautification District guidelines, etc. Randy has developed extensively within the county, including the design and architecture for the recently completed CHC building directly across the street. I have experience as a licensed contractor and real estate appraiser, and completed due diligence on this project feasibility assessment, obtaining preliminary approval from the fire department and other county agencies of the floorplans, etc.

The 2-3 year ROI on the investment is projected at 20-50%. Rough estimated costs to build out these renderings "vanilla" total about 2 million, depending on features and final approvals. An "as built" appraisal of addition should value the property at about 3 million or higher.

This property is located within an Economic Opportunity Zone (EOZ). The main tax benefits available with EOZ engagement are:

1. Deferral until 2026 of eligible capital gains invested

&

2. Tax-free exit upon sale of the QOF (Qualified Opportunity Fund) asset after 10 years

This property is listed for sale, however, we are open to selling half equity or more, and are flexible on terms. All reasonable investor offers will be considered. Ideally, we are looking for an all cash offer with no contingencies and a fast close. A 2 month lease back after close or longer would be of high value to seller. A 2 year leaseback and construction supervisor position, plus equity in the new construction, would give the buyer extreme advantage over other offers.

Remodel projects are underway and to be completed before showing to residential buyers. We are allowing investors to schedule a preview of the property now, if they have intentions of an all cash offer, and proof of funds.

EOZ summary :

If the EOZ route of development is taken, the sequence of events for an EOZ project are as follows:

When the property is refinanced, it is placed into a new Joint Venture (JV) and registered as a QOF (Qualified Opportunity Fund) the JV will also register as a Qualified Opportunity Zone Business (a QOZB) which allows the investors to reduce or eliminate capital gains tax.

Below is a summary of the Opportunity Zone Investment procedure. Without enrolling in this, there is still a large profit to be made even after paying capital gains tax.

Investors with eligible capital gains invest those gains into a QOF.

The QOF contributes at least 90% of the eligible gain from investors into a lower-tier partnership, hereinafter referred to as the JV, in exchange for a partnership interest.

The JV uses the QOF's cash contributions, as well as cash from other investors or obtained through financing, to acquire and either construct or improve property in an opportunity zone.

At the investor level, each investor must invest eligible capital gain into a QOF within a prescribed time period. The general rule is that an investor has 180 days from the date of the sale that generated the capital gain, but partners in a partnership may have a bit longer when the partnership itself sells the appreciated asset and passes the gain up to its partners on IRS Schedule K-1.